Liberty Media is to buy six regional cable franchises in Germany from Deutsche Telekom, in a deal expected to be worth around €5.5 billion (£3.4 billion).
The definitive terms of the Deutsche Telekom deal are expected to be announced next month.
Liberty Media’s presence in the US is much stronger than in Europe and this deal will be strategically important for the group. Liberty already has a majority stake in UK cable operator Telewest Communications, in a holding which also involves Microsoft and MediaOne (see Liberty Regains Majority Holding In Telewest).
The Western European cable market is expected to reach almost 60 million homes by 2005, according to projections by Merrill Lynch. The potential for broadband television services far outstrips the market potential of the digital satellite and terrestrial platforms.
Cable Penetration In Western Europe (homes ‘000s) | |||||
Year | Cable | Satellite | Terrestrial Analogue | Digtal Terrestrial | Digital Satellite |
1996 | 40,600 | 6,249 | 6,955 | 0 | 273 |
1997 | 43,313 | 7,937 | 6,519 | 0 | 2,027 |
1998 | 44,297 | 9,783 | 6,225 | 19 | 4,405 |
1999 | 46,203 | 12,140 | 5,970 | 532 | 8,350 |
2000 | 48,060 | 15,598 | 5,488 | 1,110 | 13,569 |
2001 | 50,867 | 18,671 | 5,192 | 1,816 | 17,026 |
2002 | 52,939 | 21,670 | 4,880 | 2,989 | 20,016 |
2003 | 54,994 | 24,683 | 4,569 | 4,359 | 22,855 |
2004 | 57,030 | 27,339 | 4,281 | 5,910 | 25,297 |
2005 | 58,901 | 29,829 | 4,057 | 7,792 | 27,612 |
Source: Merrill Lynch |