Neuf Cegetel has won the first round of negotiations to buy out Deutsche Telekom’s French internet access unit Club Internet. It has entered exclusive negotiations which usually means that its bid is accepted and that unless some sudden last minute legal hitch occurs, then it will complete the deal. The two sides expect to complete the transaction by the end of the first half of 2007.
The unit is called T-Online France but trades as Club Internet, a brand it bought back in 2000. Back then it had 4 million subscribers but Club Internet as it is today has just 570,000 ADSL customers to hand over to Neuf Cegetel for a value that has been cited in the press at around €340 million ($456 million).
Back in September Neuf Cegetel completed a deal to buy the AOL France access business for which it paid around $365 million for 500,000 customers, so if reports are accurate, the price per customer of the Club Internet business is around $70 per customer higher than the AOL customers, but that can probably be accounted for by the fact that AOL kept its brand, so that it could continue to operate its portal in France.
Neuf Cegetel is owned by Louis Dreyfus and mobile operator SFR and reported revenues of €2,897 million in 2006. SFR itself is just over half owned by Vivendi, with the rest being owned by Vodafone, so on a European scale this represents the Vodafone triple play in France, or at least the closest it is going to get to it. In other countries, notably Germany, the UK, and Spain Vodafone appears to be preparing a full triple play.
Neuf Cegetel has 45,000 kilometers of fiber, and has unbundled 1,200 exchanges and can reach 70% of France with its own fiber and DSLAMs and has 4 million customers, with 2.2 million of them broadband customers.
Other bidders for Club Internet were known to be cable operator Noos, owned by private equity group Cinven and the other major French DSL group, Free.
In an unrelated announcement this week Neuf Cegetel launched a fiber to the home service in Paris offering 50 Mbps broadband, with unlimited phone calls and 69 HD IPTV channels. The new service costs just an incredible €29.90 a month ($41) and a further 150 optional channels are available plus 1,500 video-on-demand programs and an optional 80 GB DVR.