Bundling Wins: Solon White Paper Argues for the Integration of Cable and Mobile Operators

London (ots) - European cable and mobile telecommunications
players should integrate, argues the strategy consultancy Solon
Management Consulting in its newly published white paper. According
to Solon, it is a powerful strategy for defying fully integrated
incumbents offering quadruple-play services (cable TV, broadband,
fixed line, and mobile). It also allows the players involved to
realize significant revenue and cost synergies. In a new entity, the
mobile operators should drive the integration process. They are the
larger parties, while many private-equity backed cable players will
become available over the next years.

Martin Weiss, partner at Solon and author of the white paper
"Bundling Wins: The Case for Cable + Mobile Integration", points out
the strong strategic arguments for a merger: "In order to defy the
incumbents going 4-play, both cable and mobile operators are forced
to expand their range of products. By joining forces, they can offer
attractive product bundles and create a larger customer base for
cross-selling". As broadband markets reach saturation across Europe,
reducing churn rate and subscriber acquisition costs are key
variables for increasing profitability. Mobile operators are facing
high levels of investment in order to set up next generation networks
(4G networks). Cable operators continuously create stable and high
level of cash flows which can help smaller mobile players to meet
their financing needs.

According to Solon estimates, a newly merged company can realize
significant revenue and cost synergies. "With fully realized
synergies," says Weiss, "the cash contribution of a cable operator
merged into a mobile operator could more than double when compared to
the cash flow of an average cable operator?.

For a merger to succeed, three points should be considered: First,
it is necessary to look at the consolidation of the respective cable
market. Most cable players are operating regional while mobile
operators have a national footprint. In a consolidated market, it is
easier to integrate a cable operator into a national business model.
Secondly, the cable operator should have demonstrated his ability of
bundling and selling 3-play products. It is more difficult to push
4-play in a market where consumers have not yet been developed into
3-play customers. Thirdly, the mobile operator should drive the
integration process.

The White Paper "Bundling Wins: The Case for Cable + Mobile
Integration" is available upon request or as download on
www.solonstrategy.com .

About Solon Management Consulting:

Solon Management Consulting is a strategy consulting boutique
concentrated in the areas of media, cable and telecommunications.
Solon?s clients are leading European media and telecommunications
companies as well as banks and private equity investors. Solon
supports its clients in the development and implementation of company
strategies, creation of new business and optimization of core
processes and accompaniment of M&A plans, from market probing to the
end of the transaction. With offices in Munich, Budapest and London,
Solon works on projects across Europe.

Press contact:
Margret Steinle, Solon Management Consulting GmbH & Co. KG,
Tel: 089 210388-0, E-mail: mas (at) solonstrategy.com
www.solonstrategy.com