Taiwan Mobile to buy Kbro for $1 billion

No. 2 phone carrier moves for cable operator

HONG KONG -- Taiwan Mobile Company, the territory's second-largest phone carrier, is to buy cable television operator Kbro Co. from U.S. investment house Carlyle Group for NT$32.8 billion ($1 billion) in cash and stock.
 
The deal will lift Taiwan Mobile's cable TV subscriber numbers to 1.6 million and increase its market share in Taiwan from 7% to 32%, leapfrogging over China Network Systems, controlled by MBK Partners, and Taiwan Broadband Communications, owned by Macquarie Media Group.
        
Cable is the dominant form of TV distribution in Taiwan, but has been in the doldrums for several years as a result of regulatory inertia and the consolidation of a once fragmented sector into an oligopoly.
        
Now the introduction of digital cable and broadband Internet are expected to give the sector a boost.
 
In the past four years, nearly all Taiwan's major multiservice operators have changed ownership as foreign finance houses have anticipated deregulation, new infrastructure investment and, eventually, higher consumption of added value digital services. Carlyle bought its majority stake in Kbro in 2006.
 
"The most significant part of this transaction ... (is that) we have acquired direct access to more than a million households in the urban areas," said Harvey Chang Taiwan Mobile president. "That will provide us with a very substantial platform to provide the convergence services."
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