The Dutch cable operator Ziggo is contemplating a stock quotation, so its financial director said. The recently formed cable company leaked the news just as it was buried under a flood of complaints. To make matters worse, the company experienced technical hiccups of its network over the weekend.Ziggo is the largest cable operator in The Netherlands with 3,2 million connections, serving 7,8 million people. The company is a three-way merger of the cable operators Casema, @Home en Multikabel. The companies were bought by two British equity companies Warburg Pincus and Cinven. Usually these companies hold the shares of companies for three to seven years. An IPO in the short run is not expected due to the bad stock exchange climate.
An IPO opens the door for foreign companies to come. Before the merger into Ziggo the private equity houses hoped to sell the cable companies to UPC, which was the largest cable company at that time with 2,1 million connections. Together UPC and the merger would have delivered a countrywide network and would have established competition for the incumbent telecom company KPN. However UPC’s holding company Liberty Global declined the invitation.
The remarks about an IPO were made in a week that the Dutch consumer association started a complaints’ desk as Ziggo was unable to handle all the traffic. In less than a week the consumer association registered 10.000 complaints, ranging from administrative actions to helpdesk problems with telephone, internet and television. The management of Ziggo was completely taken by surprise. Customers grew angry because of the long waiting times and the tariff for the helpdesk. Ziggo will meet the consumer association this week to solve to exchange the results of the complaints’ desk.
By the end of the week the disasters were still not over. Affecting more than 300.000 subscribers in the Utrecht province, the telephone network showed a defect, affecting the telephone and internet services. By Sunday night the breakdowns had been solved.
Despite the swell of complaints and the technical breakdown the company went on to advertise its services on radio, enticing new subscribers. A company spokes person indicated that they had followed the PR rule book for mergers. However they should have known that two is a party and three is a crowd.
Blog Posting Number: 1130
Tags: cable, IPO
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