After several years of trying unsuccessfully to compete
with Portuguese cable giant TV Cabo, United Pan-Europe Communications (UPC) last week sold
its Portuguese systems from its Intercabo unit to independent cable operator Cabovisao.
'UPC didn't want to continue operating, and we
have bought just Intercabo's assets, their systems, but Intercabo still exists as a
company,' said Ana M. Russo, programming director of Cabovisao, which is 75
percent-controlled by Canadian investor Cable Satisfaction International Inc. Terms of the
deal were not disclosed.
'We haven't bought Intercabo's licenses
because we weren't interested in them, as we have our own ones,' Russo said.
The investment in Intercabo was initially started about
five years ago by United International Holdings Inc., which later merged all of its
European systems with those of Philips Media into United and Philips Communications. UIH
bought out Philips last year, and it renamed the venture.
Intercabo managers declined to comment about UPC's
reason for leaving the Portuguese market. One analyst speculated that the country's
tight regulatory rules, which keep cable operators out of telephony until 2000, may have
played a role.
Most other European markets are beginning to allow cable
telephony this year. Competition against TV Cabo, a unit of telco Portugal Telecom, was
clearly a factor.
The new owner of UPC's Portuguese systems, Cabovisao,
has authorizations for franchises in 143 contiguous municipalities. The company's
licensed area covers 1.5 million potential households. It began passing homes last year
and, so far, it has 30,000 homes passed and 11,000 subscribers to its basic offer of 43
Intercabo, which holds licenses to serve approximately
700,000 homes in the Greater Lisbon area, only has '12,000 households passed and
2,800 subscribers in the south of Lisbon area,' according to a source from the
From the start of the Portuguese cable market, TV Cabo has
always had a jump on its smaller competitors. 'TV Cabo began passing homes one year
before any other operator had licenses awarded,' Russo said. But, she added, 'TV
Cabo operates only in the main cities. They don't cover all of the territory.'