The agreement is subject to review by the Company’s Board of Directors and will be submitted to Anatel. Data below is based on Brazilian GAAP and all figures are stated in Brazilian Reais.
Globo Cabo, currently the largest Pay Television Operator and Broadband Service Provider in Brazil, with 18 cable distribution systems reaching over 1 million homes located primarily in the states of São Paulo, Rio de Janeiro, Minas
Gerais and Brasilia, will provide services to an additional 370,000 subscribers in the states of Rio Grande do Sul, Santa Catarina and Paraná.
The combined entity will provide pay television services to approximately 1.4 million existing subscribers and manage a network that reaches approximately 6 million homes in the most prosperous regions of Brazil.
No other pay TV operator in the country has the same critical mass of subscribers or the coverage area that the new Globo Cabo will have. The consolidated entity will be not only the largest pay TV provider in Brazil, but the largest in Latin America, commented Roberto Irineu Marinho, Chairman of the Board of Globo Cabo and Vice President of the Globo Organizations.
The economies of scale resulting from the merger will bring significant competitive advantages to the Company, which will be reflected in lower unit costs for subscriber acquisition and maintenance, as well as operating costs, in addition to reductions in general administrative costs.
Globo Cabo and Net Sul have been operating with the same brands, commercial activities and programming packages, which will facilitate the integration of the two businesses. The cable operations currently controlled by Net Sul will be
Content from our partners
regrouped into a cluster of Globo Cabo. The solid relationship that we have developed with our subscriber base throughout the three southern states will be
further benefited and expanded by the capabilities that Globo Cabo’s strategic partners bring to the business,
Commented Nelson Sirotsky, president of Net Sul and RBS, controlling shareholder of Net Sul. RBS, together with the Globo Organizations, Bradesco and Microsoft represent a quality alliance dedicated to the development of broadband services for our clients, added Mr. Sirotsky.
The present environment of economic stability presents an opportunity for the Company to develop the significant growth potential of its subscriber TV business, whose current penetration rate is approximately 23% (1.4 million
subscribers out of a total of 6 million homes passed), still low when compared to other markets.
The integration of the two companies is also expected to accelerate the development of the broadband Internet access service Vírtua. Net Sul, which had already begun to offer a similar product, will now be able to offer Vírtua in the same manner that Globo Cabo does, with all of the same technical and marketing support infrastructure.
With the recent acquisition of Vicom, Globo Cabo took an important step into the corporate marketplace. Now with the consolidation of Net Sul, the networks in the southern states of Brazil will become an integral part of the corporate
network business solutions that the Company expects to be rolling out in the near future.
With the integration of the two companies, Globo Cabo S.A. will have a cable platform that extends throughout a geographic region that accounts for over 80% of the Brazilian GDP, spanning from Brasilia to Porto Alegre, explained
Moysés Pluciennik, President of Globo Cabo S.A. Our combined network of over 33,000 km and the ability to provide digital broadband connectivity in these regions makes us the primary Brazilian platform for integrated image, voice and
data transmission for homes and businesses, added Mr. Pluciennik.
