Norwegian telecommunications giant Telenor has taken outright control of loss-making Nordic pay-TV operator Canal Digital.
It did so by buying out the 50 % stake in the joint venture held by Vivendi Universal's TV and film division Canal Plus. It is paying Euros 300m, of which Euros63m is deferred.
The two companies, however, have signed a long-term exclusive distribution agreement for Canal Plus' premium pay-TV channels and the Kiosk pay-per-view service on Canal Digital's platform. Canal Plus Technologies will continue servicing Canal Digital with its interactive TV technology.
The considerable losses of the company are understood to be the main reason for the restructuring of Canal Digital's ownership structure. Canal Digital's losses amounted to $38.7m in 2000. Telenor and Canal Plus have lost around $106m since it was established in 1997 as a joint venture between Telenor and Filmnet, later acquired by Canal Plus.
The move, however, is the opposite of the strategy adopted by the Canal Plus Group in Italy and Poland, where it has lost money, but bought in minority stakes and this week took control of Telepiu.
Telenor's main interest in buying out Canal Plus is its need for digital content and interactive services. By acquiring the stake, Telenor believes it can more easily reach agreements with other local television giants, such as the public television broadcaster NRK or Norway's largest private TV-channel TV2 - both channels having refused any collaboration with Telenor involving their competitor Canal Plus.
Canal Digital broadcasts public-service-broadcasters to one million paying customers in the Nordic countries. Around half of the households have an additional subscription to film, sports and other thematic channels such as Canal Plus, Canal Plus Yellow, Canal Plus Blue, BBC World, Eurosport, MTV and Discovery Channel among others.
The agreement yet has to be approved by the respective governmental authorities.