NTL revenues rise as bidding war continues

15 Mar 2005

NTL Ireland, currently the subject of a bidding war, has reported a 3.2pc increase in fourth-quarter revenues on the year to £19.3m sterling.

The company revealed that during the fourth quarter residential customers increased by approximately 4,100 to reach 347,800.

Monthly customer churn improved substantially to 0.6pc, representing an improvement of more than 50pc compared to the same period a year ago.

The company said that it is continuing to invest in new digital television and broadband services and as a result, homes marketable for broadband services increased by nearly 22,000 to 88,100. Actual broadband customers increased to 7,500 – more than double the number at the end of last year.

Commenting on the results, Graham Sutherland, managing director of Ntl Ireland, said: “We are delighted with the continued robust financial performance of NTL Ireland. Strong customer growth of 4,100 in the fourth quarter 2004 is particularly encouraging as we continue to agressively invest in both digital television and broadband.”

On closer inspection it is understood that NTL Ireland has a total marketable number of households for telecoms at present of 463,700 and for digital television a marketable number of households at present of 421,300, making the company a ripe opportunity for a company seeking to deploy such services to the Irish market.

At present at least four bidders have emerged so far aiming to acquire NTL Ireland: UGC Europe, which already owns the other main Irish cable company Chorus; Kerry-born entrepreneur John Riordan has lodged a bid with the backing of venture capital firm Doughty Hanson; a consortium including TV firm Setanta, insurance giant AIG and IAWS; and US merchant bank Veronis Suhler Stevenson, which has teamed up with Merrion Capital. Contrary to press reports, the latter consortium has not dropped out of the bidding race.

Sources estimate that the likely acquisition price for NTL Ireland – when a decision is reached on the successful bidder later this month – could be anything between €150m and €200m once network upgrade costs have been factored in. In 1999, NTL acquired Cablelink (now NTL Ireland) for €680m, which it is understood to have conceded was way above its proper valuation.

Outlining its existing market penetration the company revealed that it had a 0pc share of the telecoms market having made a decision two years ago to abandon that sector. It has a television market share of 70.8pc and an 8.5pc share of the existing broadband market in Ireland.

The company also revealed that it could potentially offer microwave multi-point distribution services (MMDS) to 70,000 marketable homes. At present it has approximately 19,300 digital MMDS customers.

By John Kennedy