UPC, Europe's largest cable group, hit back at Dutch regulators which have promised to bring in competition to the broadband market. But that was not enough to prevent its shares hitting a record low for the second day running.
On Thursday evening UPC shares closed down 26% at Euros5.90 on the Amsterdam stock market. On Tuesday, prior to the announcement they traded at Euros9.30.
Dutch telecom regulator OPTA and competition regulator NMa said it would like the internet access market in the Netherlands to be split into two - one for high-speed broadband and one for narrowband dial-up internet. UPC is likely to be obliged to open up its cable networks to companies that compete with its chello content services if, as is suggested, all cable and ADSL providers are classified as broadband.
UPC managing director of corporate affairs Manuel Kohnstamm said: "We count on the responsibility of regulators and lawmakers to work with our industry. It is in the public interest to ensure that policy creates value and stimulates investment in the industry."
Having invested heavily in upgrading its cable networks, the company has long held out against opening its systems to broadband rivals. Although it has a 95% share of the nascent broadband sector, it also argues that the national telecoms provider KPN has a far greater number of internet clients.
"UPC is in a dire situation and to tighten the screws now to me seems difficult," said Rabo Securities analyst Arjan Dorrestijn. "These measures would not give the company the opportunity to earn back their investments,''.
Battered by concerns about its ability to finance its investments, UPC has seen its shares fall by over 90% from the Euros62 level of this time last year. After the latest share price fall the company, which is 51% owned by UnitedGlobalCom, is valued at $2.08bn (Euros2.31bn).