Cable TV provider Astral Telecom is in talks to buy Cable Vision Romania (CVR), one of the last large acquisition targets on the Romanian cable TV market, sources close to the company say.
CVR is currently held by RomTelecom and has about 50,000 subscribers. It accounts for 2%-3% of the Romanian cable TV market. Although the market share is low, the transaction is nonetheless important, because along with the network held by businessman Constantin Chelu, CVR is the last company with a sufficiently high number of subscribers to appeal to major players
At a price of about $110/subscriber, as operated on the market at the moment, CVR is appraised at $5-$6 million.
The acquisition of CVR will be one of the final stages in a race for consolidation of the cable TV market, which started a few years back, leading to the top three players (Astral, RCS&RDS and UPC) accounting for about 60% of the market.
Astral's representatives did not provide more information about the talks over the acquisition of CVR.
"Astral has been involved in five talks and mediations with RomTelecom concerning various issues related to our field of activity. We have not yet received at least a partial answer in any of the discussions, so we cannot provide comment on any of them," Aurel Costea, Astral's chief executive told Ziarul Financiar. RomTelecom has been undergoing a streamlining process for a while, which, besides massive layoffs, is also taking into consideration the situation of its subsidiaries, such as Cosmorom and CVR.
"Over the last 12 months during the restructuring process, RomTelecom's management has analysed the situation of all its subsidiaries, such as Cable Vision Romania. We have received a number of offers for this company and we are studying them right now," says Dan Pazara, corporate affairs director of RomTelecom.
The consolidation of the Romanian cable TV market, which is necessary if players are to reach the critical mass required to provide integrated cable TV- Internet - telephony services, has gained momentum, moving to major deals in 2000. This was when Astral took over Kappa and became number one on the market. RCS&RDS retorted and bought TerraSat in 2002 thus regaining the top spot.
Early this year, the two rivals joined forces to buy FX Communications for some $16 million.
The cable TV market achieved a balance of power as a result, with Astral and RCS&RDS on a relatively equal market footing, each of them accounting for 24%-25%.
"The reorganisation of the cable communications market in Romania over the last few years has put CVR in 5th or 6th position with a 2%-3% market share, I believe. As for the brand and the value of the people working for this company, CVR certainly holds a leading position. Astral puts a special emphasis on such values," Aurel Costea said.
Competition between Astral and RCS&RDS for the top spot is being adjudicated by the largest strategic investor on the Romanian cable TV market, the US-based UPC Group.
UPC has preferred to embrace a cautious policy on the Romanian market, settling for the third position (10%).
laurentiu.ispir@zf.ro
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