MTG sells stake in Zitius Swedish Communications Operator

December 18 2013

Modern Times Group MTG AB (publ.) (‘MTG’ or ‘the Group’), the international entertainment group, today announced that it has signed an agreement to sell its total shareholding, consisting of 80% of the shares in the Swedish Communications Operator Zitius Service Delivery AB (‘Zitius’), to TeliaSonera AB (‘Telia’) for a cash consideration that values Zitius at an enterprise value (100%) of SEK 380 million. The transaction is subject to regulatory approval from the Swedish competition authority.

The Open Access network model is specific to the Swedish broadband market and provides an open environment where multiple service providers can sign agreements with a communications operator to market their services to the end consumer, typically in multi-dwelling residential apartment buildings in towns and cities.

Since acquiring Zitius in August 2012, MTG has invested in the expansion of the company’s operations, and Zitius has won a number of additional distribution contracts in 2013. This has expanded its number of connected households by 12% and active households, subscribing to at least one service, by 34%.

Jørgen Madsen Lindemann, President and CEO of MTG, commented: “The Open Access market in Sweden has evolved rapidly over the last 16 months. The increased competition between communications operators has resulted in large contracts changing hands, as well as significant improvements in the services available in the different networks. This proves that the Open Access network model is both sustainable and benefits consumers through freedom of choice. As a result, it is no longer necessary for MTG to own Zitius.”

“We have a platform agnostic pay-TV strategy in the Nordic region and we will continue to offer our free-TV and pay-TV channels to subscribers in Zitius’ networks, as well as distribute our channel packages through a broad range of other third party pay-TV networks.”

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