Andersen Snaps Up Moscow's Comcor-TV

New York-based Andersen Group said Thursday that it is boosting its stake in Moscow cable television provider Comcor-TV from 50 percent to full 100 percent ownership.

Under the deal, Andersen will obtain control over the cable arm of Moscow Telecommunications Corp., known as Comcor, in exchange for a 49 percent share in Andersen Group. The transaction is expected to close in the fourth quarter of this year.

Andersen Group has said it intends to invest $6 million in Comcor-TV, with $3.5 million in cash injected up front.

Andersen chairman Francis Baker called the deal a way for his investment company to grab a slice of the promising broadband market.

"Through the acquisition, our program to provide broadband communications throughout Moscow -- a profoundly underserved market -- is progressing," he said.

Comcor-TV began to roll out its network in central Moscow in August 2001. It is currently wiring the capital to provide "last mile" broadband services, extending cable television and high-speed Internet connections from a centralized network. One wire enables access to both services.

Under a 50-year contract, the company has rights to use the Moscow Fiber-Optic Network, an infrastructure grid into which City Hall has funneled more than $400 million since 1992.

Comcor-TV is licensed to service up to 1.5 million homes and businesses, or 44 percent of all households in Moscow.

Since the launch of its network, the company has progressed only a fraction of the way toward that ceiling. Its cable television clients number 47,000, and its Internet subscribers number 6,400.

The company's network cables are in place to serve 125,000 apartments, a number it wants to boost by another 75,000 by the end of this year.

Baker is confident that between Moscow's ever-growing prosperity and the popularity of pay-per-view programming available on cable television, the company's prospects can only improve.

"We are betting that the Moscow middle class is now sufficiently affluent to take up these products enthusiastically," he said. "We expect that the convenience factor of pay-per-view will attract users, as compared to physically renting a videotape."