Vir­gin Me­dia con­sid­er­ing takeover of Hull’s KCOM

The Sunday Telegraph - Money & Business - - Front page - By Christo­pher Williams

VIR­GIN Me­dia is ex­plor­ing what would be a his­toric takeover of KCOM, the monopoly tele­coms provider in Hull, in an at­tempt to ac­cel­er­ate its net­work ex­pan­sion pro­gramme.

The ca­ble op­er­a­tor, con­trolled by US bil­lion­aire John Malone, is con­sid­er­ing a bid to add KCOM’S 200,000 “full-fi­bre” broad­band lines to its net­work, ac­cord­ing to mul­ti­ple sources.

It is un­der­stood the de­lib­er­a­tions are at an early stage. Vir­gin Me­dia could yet de­cide not to make a bid for KCOM, sources said.

How­ever the ac­qui­si­tion is be­ing weighed up by Vir­gin Me­dia and its par­ent com­pany Lib­erty Global as part of a land­grab for ul­tra-fast broad­band cus­tomers as com­pe­ti­tion from BT and other net­work-builders in­ten­si­fies.

The ca­ble op­er­a­tor is al­ready in­vest­ing £3bn to ex­pand cov­er­age from a half to two-thirds of the coun­try. It aimed to com­plete the work by next year, but has been heav­ily de­layed. The ad­di­tion of KCOM’S net­work could pro­vide a quick boost.

A deal would end more than a cen­tury of in­de­pen­dence for the tele­coms net­work in Hull, which due to a quirk of his­tory is the only part of the coun­try not served by Open­reach.

KCOM was never sub­sumed into BT and re­mained un­der municipal con­trol un­til a stock mar­ket float in 1999. Hull City Coun­cil re­mained a ma­jor share­holder un­til 2007 when it sold off its re­main­ing shares.

In re­cent years the FTSE 250 mem­ber has raced ahead of BT’S Open­reach in­fra­struc­ture sub­sidiary to con­nect ev­ery home and busi­ness on its patch with new fi­bre-op­tic lines.

Vir­gin Me­dia is un­der­stood to be con­sid­er­ing a bid in the wake of a ma­jor profit warn­ing by KCOM in Novem­ber, trig­gered by poor per­for­mance in its di­vi­sions pro­vid­ing busi­nesses na­tion­wide. Vir­gin Me­dia and KCOM de­clined to com­ment.

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