KPN bids for cable television services

9 June 2004

AMSTERDAM — Telecoms firm KPN is bidding to break into the cable industry to broadcast radio and television programmes. It has made an offer to lease capacity from cable companies Casema, UPC and Essent.

KPN said on Wednesday morning that competition in the cable market — which has been made possible by new telecoms legislation — will benefit consumers.

It also said cable companies are obligated by the new legislation to open up their networks. It expects tough negotiations, but also anticipates that it will win through in the end.

The negotiations must be completed within three months. If that deadline is not met, KPN will take the matter to industry supervision authority Opta in a bid to force a resolution, Dutch public news service NOS reported.

KPN plans to buy programmes from public broadcasters and commercial company Endemol and broadcast them into households via cable technology. It hopes to offer TV services from next year at cheaper prices than its competitors.

Besides telephone services and internet access, KPN wants to broadcast radio and television programmes because developments in the technical industry are occurring so rapidly it is risky to restrict operations to one technology. It wants to offer an entire package of products.

The company is also conducting experiments with providing digital television via ADSL — which means via the telephone line — but the technology is not yet adequate enough, newspaper NRC reported.

As the previous owner of Casema, KPN was active for a long time in the cable television industry, but was forced by the then Transport and Public Works Minister Annemarie Jorritsma to sell Casema in 1997. The cable company was bought by France Telecom and later ended up in US hands.

KPN’s move to re-enter the cable industry comes at a time when cable companies are experiencing trouble. In recent years, cable companies have spent large sums of money by buying networks from municipal authorities and converting them for new services. But consumer demand has not met the industry’s hopes.

Besides ADSL and cable, KPN is directly involved in digital television and radio. It holds a 30 percent share in the company Digitenne.

Subject: Dutch news