NOVA platforms in Greece and Cyprus up for sale

Reports are emerging that Naspers, the South Africa based mother company of NedMed NV, which has a significant stake in Multichoice has decided to sell its stake which affects a total of 350.000 subscribers, of whom 340.000 are thought to be in Greece and 10.000 in Cyprus through the NOVA platforms.

NedMed is probably afraid of competition in Greece with the entry of the telecom companies into the pay-TV market through triple play (Internet, TV, Tel) packages. They are apparently worried that they could lose market domination, similar to what happened in Cyprus when after LTV abandoned them and went solo, the subscriber numbers of Multichoice fell from 60.000 to 10.000.

The giant South African company is not desperate for cash, so we expect the process to take a while, and the leak to the market about its plans to sell may be an attempt to catch the attention of the new entrants to the market, such as OTE, which is believed to have its own aggressive agenda as to how it will take away business from NOVA Greece.

At first glance, the 340.000 NOVA Greece subscriber numbers are impressive, but when compared to the 4 mln total number of households and if you strip out those subscribers based in Cyprus, Germany and the UK, then the actual local Greece penetration rate comes to 6%, which is very low compared to the European average of 23%.

If a generous bid is made for the NOVA platforms, then obviously one of the other beneficiaries will be LTV, which has a 49% in the CSE listed Multichoice and 4% in Multichoice Hellas. If on the other hand, a low bid is deliberately made, then that may force LTV to submit a counter-offer to protect its interests and fight off competition coming its way. One way or another, the pay-TV market is set for very exciting times and developments.

(source: Market Talk column as it appeared in print edition of Financial Mirror Nov7)