RealTime IT News

Excite Chello Deal Is Off

[London, ENGLAND] United Pan-Europe Communications (UPC) and Excite@Home have abandoned their mega-deal to create Excite Chello, a venture that would have created the largest broadband company outside North America.

The proposed deal, first announced in July this year, proved to be too complex and was fraught with difficult business issues that the parties were unable to resolve.

Mark Schneider, chairman of the UnitedGlobalCom subsidiary UPC which owns broadband operator chello, said both sides had worked very hard, but in the end they were not able to reach agreement.

"We have therefore decided that it is in the best interest of our shareholders to focus on our core broadband Internet subscriber business and the tremendous interactive TV opportunity that exists in the extensive United Group footprint of cable TV, satellite and broadband wireless operations," said Schneider.

Schneider went on to point out the chello still had the support of Liberty Media Corporation, a fact that was confirmed by Liberty's Chairman John Malone.

Roger Lynch, president and chief executive of chello broadband, said the business was continuing to expand rapidly and exceeded 0.3 million broadband Internet subscribers in November.

"This represents the largest base of broadband Internet subscribers in Europe and more than triple the number we had this time last year," said Lynch.

Chello is proud of its high penetration rate, which currently stands at between 10 percent and 12 percent of the homes where its service is available in Western European markets. It has a reputation as being a first-rate Internet service provider -- and was chosen as Best European Consumer ISP at last year's ISP Forum.

In November this year, chello announced its expansion into Central Europe in a partnership with Hungarian broadband company UPC Magyarország.

Outside Europe, chello distributes broadband by cable in New Zealand and Chile, while in Australia it has a wireless and satellite operation.