Dutch cable giant United Pan-Europe Communications (UPC) is positioning itself to become a major supplier of content to third generation mobile phone operators and as a video-on-demand (VoD) wholesaler.

Although the group is expanding from cable into telephony and wireless communications, UPC chairman Mark Schneider said that cost factors mean that the group is unlikely to bid for any of the new phone licences being auctioned off around Europe. "What we saw in England bordered on foolishness," Schneider said. He added that in the UK the winners were paying some $1,000 per subscriber just for access to spectrum, a figure that compares to $200 to acquire a cable TV subscriber: "We will do better spending our capital on broadband."

"However, these companies will all need partners," Schneider added. "It is about content, but there is more to it. We have an integrated vision and will be able to deliver [third generation mobile operators] backbone, traffic, digital TV and chello." He pointed to Thursday's joint marketing deal with [second generation] mobile operator Dutchtone as an example of co-operation.

"We have a media strategy," insisted UPC finance director Charles Bracken. "VoD will be a big part of our business from next year. We can sell it to our own customers and to other platforms. We can do better than anyone else because of our service activities and because of our set-top box."

Explaining why VoD is set to be a winner, Schneider said: "we are in a unique position. VoD is a transactional business and we are in a position to share revenues with owners. In that respect we are going the opposite way to Canal Plus. We intend to keep the pricing at what everyone can afford. It could be NLG0.25-0.50 for someone who has missed the evening news. Or for a film it could be slightly higher than at the video store because the studios won't let us undersell their films and because we are truly on demand."

UPC said that its prospects as a content supplier are not dented by its failure to go ahead with the takeover of SBS Broadcasting which was wrecked last month by its falling share price (Screendaily, May 22). Schneider said: "we are no worse off without them - we still have ongoing relations with them." Pointing out that UPC still owns a 23% stake in SBS, Schneider added: "It is possible that something could be negotiated later," and hinted that the group could be in the market for other acquisitions that deliver content.