U.S. Group Banks on Russian Broadband
Moscow -- A U.S. investment company with no previous
experience in cable television agreed to team up with a local firm with the goal of
connecting almost one-half of the city's residences to multichannel TV and the
Andersen Group Inc., a NASDAQ-listed holding company, said
earlier this month that it paid $33 million for just under 50 percent of Comcor TV, a
cabler with close ties to the government. They aim to connect 1.5 million apartments, or
44 percent of the city's households, to multichannel TV and the Internet by 2005.
"Moscow is one of the largest cities in Europe that is
hugely underserved by quality communications," Andersen chairman Frank Baker said.
"There are very few places in the world that can offer such a growth rate."
Comcor, a partially city-owned company, built and operates
the Moscow Fiber Optic Network, which extends 2,000 kilometers and includes more than 200
primary nodes. Comcor has also connected three pilot areas in Moscow, or about 100,000
homes, aiming to begin commercial service next month.
Comcor launched in 1992 when Moscow Mayor Yuri Luzhkov
helped to set up the company and invested the city's money into the construction of a
new generation of communication networks. But after the 1998 economic meltdown, the city
government had to stop financing the project, and it told Comcor to look for foreign
Baker said this was his company's first investment in
broadband communications, adding that it may make similar ones in other Russian cities.
Comcor is contributing its hybrid fiber-coaxial cable
network, licenses and political connections to the project. Anderson will kick in up to
$35 million. The project may entail a total investment of $350 million, including $150
million for equipment.
Baker said that during the first year, Comcor TV expects to
attract about 50,000 subscribers. Although the new service will cost more than what
Muscovites pay to use shared rooftop antennas, the substantially higher quality of
reception is expected to bring in clients.
The cheapest package of Russian television channels will
cost about $2 per month, providing all broadcast channels available in the city, plus
minor local channels and 22 audio channels. Packages of foreign channels will cost $12 per
The project will also offer Internet access at speeds
between 128 kilobits per second and 10 megabits per second.
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