New York -- NTL Inc., Britain's No. 3 MSO, won the
auction for Cablelink Ltd., Ireland's largest pay TV operator, with a $730 million
Cablelink has 360,000 cable and wireless cable subscribers
in its 420,000-home franchise area, putting a per-subscriber price tag of about $2,028 on
NTL said it expects to upgrade all of Cablelink's
subscribers to 750-megahertz, two-way capacity. Cablelink has exclusive rights to its
franchise areas for the next five years, and it is licensed to provide telephony and
"This was a prudent strategic move for NTL. However,
at this valuation, with a significant capital expenditure going forward, the price was
fairly high," said CIBC Oppenheimer Corp. analyst Aryeh Bourkoff, who follows NTL and
other European cable debt.
Standard & Poor's Corp. placed NTL's debt on
"credit watch with negative implications," noting "the possible weakening
of the group's financial profile subsequent to the Cablelink deal, which follows the
recent acquisition by NTL of Australian broadcast-transmission assets for $423
allows us to better integrate our
operations in Northern Ireland and the Republic of Ireland, paving the way for the
introduction of advanced services," NTL president and CEO Barclay Knapp said in a
NTL bought the system from telco Telecom Eire and public
broadcaster Radio Telesis Eire.
AT&T Corp.'sLiberty Media International
and United International Holdings Inc.'s United Pan Europe Communications N.V. (UPC)
also bid on Cablelink. In addition, Paul Allen's Charter Communications was partnered
with Irish telco Esat Telecom Group plc to bid on the system.
NTL didn't return phone calls seeking further comment.
Esat contested NTL's bid, which, rather than a fixed price, was committed to be 15
percent greater than the highest competing bid, published reports said. Esat couldn't
be reached for comment.