Paris - NTL, the UK's No 1 cable television company, and Morgan Stanley Private Equity (MSPE) had agreed to buy France Telecom's 49,9 percent of Noos, Suez Lyonnaise des Eaux's cable business, for E1,35 billion (R8,53 billion) the companies said yesterday.
NTL will buy 27 percent and the investment arm of Morgan Stanley Dean Witter will acquire 22,9 percent of Noos, France's biggest cable operator. Noos has 736 000 subscribers.
About 18 percent of Europe's population was expected to subscribe to fast Web services by 2005, according to Forrester Research, a market research company.
"Morgan Stanley and NTL are better positioned to invest in upgrading the network to offer broadband or telephony," said Patrick Foulis, an analyst at UBS Warburg in London.
France Telecom will make a gain in pretax sales of E534 million. "This allows France Telecom to focus on their mobile, Internet and Global One businesses," said an analyst with Aurel-Leven. "Cable has never been a priority."
The partnership with NTL and Morgan Stanley should allow Suez to double Noos's penetration and speed up plans to offer phone services over the network, Suez said.
Noos already offers Internet services to 44 000 clients, and 3 000 subscribe to its telephone services. Suez said it would record a E300 million gain from the transaction. - Bloomberg