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AOL plans cable acquisitions as broadband boss goes

Europe going cheap

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ComputerWire: IT Industry Intelligence

AOL Time Warner Inc has joined the group of companies circling Europe's debt-burdened cable operators as it seeks to develop its broadband strategy following the set-back in December 2001 when it lost the battle for AT&T's Broadband cable division to Comcast Corp.

Chairman Steve Case told French business daily Les Echoes that it wants to acquire cable TV companies in France and the UK. He ruled out acquisitions in Germany following a decision of the Germany cartel office to block Liberty Media's acquisition of Deutsche Telekom AG's cable interests, claiming the market there was neither open nor competitive.

AOL demonstrated its anxiety to inject new urgency into broadband when on Friday it replaced the head of its broadband unit. Audrey Weil, who has been head of the broadband unit since last summer, will leave in May. She will be replaced by Lisa Hook, who is currently head of the company's AOL Anywhere operation. "Audrey Weil is taking a break. She's coming back at the end of the summer and will take on new responsibilities," said a company official.

Europe's struggling cable operators represent an easy opportunity for AOL to develop its strategy with two of the major players, NTL Inc in the UK and Amsterdam, Netherlands-based United Pan-Europe Communications NV (UPC), both of which are involved in major restructuring operations that are likely to mean debt-for-equity swaps. This, in turn, has cast suspicion on operators such as Telewest Communications Plc that insist they are fully funded.

AOL has come under criticism from analysts for its lack of activity. When the company released its full-year figures in January, Richard Parsons, who will take over as CEO later this year, said: "Broadband is probably the most promising source of growth for our company for years to come. We understand this is where the game is going to be played in the next couple years in terms of growth opportunities."

With a substantial presence in Europe already, AOL will not find a better time to make a clutch of cable acquisitions at bargain-basement prices.

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