TDC and TeliaSonera eye ailing fibre-optic firm
Danish incumbent TDC and Nordic operator TeliaSonera are interested in picking up the fibre optic assets of MidtVest BredbŒnd (MVB), which filed for receivership on January 9, according to local media reports.
However, the Danish government was quick to say that TDC would not be allowed to buy MVB due to competition issues.
Fibre optic start-up MVB offers triple-play services in Denmark's Midt- and Vestjylland regions. The firm filed for receivership after its creditors upped the pressure on its owners to repay some of their obligations.
In a statement, MVB explains that its status as a young company (it started in 2004) has made it particularly vulnerable to the financial crisis.
"It is clear, that the financial crisis wouldn't by far have had such an impact on us, had MVB been a well-established and older company instead of a start-up," MVB chairman Flemming Poulsen said in a statement.
The economic downturn notably meant that the six utility companies that own MVB recently decided to plug a DKr80m (E10.7m) capital injection that they had agreed to provide in late 2008.
"It's a real shame, especially because it happens due to external circumstances that have no origins in MVB's primary activity," Poulsen said.
The company of some 80 employees ended 2006 with a net loss of Dkr39.3m (E5.3m), which more than doubled to Dkr110m (E14.8m) in 2007.
MVB's problems emerged at a shareholder meeting last December, when its owners decided to write down the firm's fixed assets by DKr261m (E35m) while converting Dkr62m (E8.3m) in debt into capital loan. The meeting also saw MVB lose one of its seven original owners, energy firm Ringk¿bing Amts H¿jsp¾nding (RAH), which decided to pull out of the venture.
"The roll-out of fibre optic broadband is going slower than expected," Poulsen had said at the time. "At the same time competition on the market is rising markedly, pushing prices further and further down."
MVB's fibre optic network covers 40,000 households in Midtylland and Vestjylland. Of these, 11,000 have signed up to its triple-play service of fixed-line telephone, TV and internet, accounting for a market share of 27%.
MVB spokesperson Per Tornvig would not reveal the firm's expansion targets, but said the regions where MVB operates consist of some 175,000 households and businesses. "So that's the maximum number," he said.
MVB is owned by utility firms Grindsted El- og Varmev¾rk, Ikast V¾rkerne, Nordvestjysk Elforsyningsselskab, Midtjyllands Elektricitetsforsynings Selskab, Thy-Mors Energi and Thy H¿jsp¾ndingsv¾rk.
