Unitymedia Expands Cable Footprint

COLOGNE, August 11:
Germany’s Unitymedia Hessen has signed a deal to acquire PrimaCom’s networks in
Aachen (North Rhine Westphalia) and Wiesbaden (Hesse) for approximately 49
million euros, adding some 100,000 cable subscribers to its reach.

The acquisition will
increase the company’s subscriber base that has access to Unity3play to more
than 95 percent, offering these triple-play products in Aachen and Wiesbaden
once the cities have been upgraded. The acquired subscribers are already
connected to Unitymedia’s network through an existing delivery contract with
PrimaCom that only covers digital television direct access.

Closing of the transaction
is subject to Bundeskartellamt (FCO) review and is expected late in the third
quarter of this year. Unitymedia anticipates an additional 7 million euros of
upgrade expenditure for these cities, with limited integration cost and
additional success-based in-home wiring and customer premise equipment spend.
As a result of converting basic television contracts from bulk signal delivery
to direct billing, Unitymedia expects a one-time reduction of reported
subscribers by approximately 14,000 after closing, with higher ARPU as a
result.

Parm Sandhu, the CEO of
Unitymedia, commented: “This acquisition of the Aachen and Wiesbaden local
networks is another milestone for Unitymedia. These cities are demographically
attractive and the only ones of significant size in the Unitymedia cable
footprint where the core network has not yet been upgraded to bi-directional
capability to provide broadband Internet and telephony services. We intend to
rectify this quickly after closing and allow the citizens of Aachen and
Wiesbaden to benefit from the best value triple play offers available in NRW
and Hessen.”

—By Kristin
Brzoznowski