Castle targets TVNZ subsidiary - with help from Fay, Richwhite

UK-based Castle Transmission International (CTI)is remaining tight-lipped about its bid for BellSouth's local GSM network - but a senior official is frank about CTI's desire to buy Broadcast Communications (BCL), the transmission wing of TVNZ. CTI chief financial officer George Rees, fresh from bidding for BCL's Australian equivalent, says CTI is 'anxiously waiting to see what comes out' of government deliberations on asset sales.

UK-based Castle Transmission International (CTI)is remaining tight-lipped about its bid for BellSouth’s local GSM network — but a senior official says CTI is keen to buy Broadcast Communications, the transmission wing of TVNZ.

CTI chief financial officer George Reese is handling negotiations over the purchase of assets in New Zealand. He describes CTI’s potential bid for the BellSouth network, which is thought to be worth $500 million to $700 million, as “a sensitive topic at this stage” and declined further comment last week. Reese is more forthcoming on CTI’s interest in BCL, acknowledging that “we have our eye on that”. We’re anxiously waiting to see what comes out, what the government decides to do with those assets.”

Reese says he has had various discussions of a general nature about infrastructure assets, in New Zealand and Australia with both private and public parties.

He confirms that CTI has “a relationship” with Michael Fay and David Rich-white, stemming from Fay, Richwhite’s investment in CTI’s parent company, communications group Crown Castle, but declined last week to say what role the pair had been filling in negotiations for New Zealand assets.

Both the National Transmission Authority and BCL would be logical acquisitions for CTI, which operates what was until January last year the BBC’s Home Service Transmission business. CTI bought the business and gained a 10-year contract to supply the BBC’s existing analogue services.

In December CTI was awarded the contract to provide digital TV transmission services to British Digital Broadcasting, and shortly after was appointed by the BBC as supplier for its new Digital Terrestrial Television (DTT) service under a 12-year contract.

In February this year, CTI announced its intention to invest more than £100 million in new digital transmission platforms to serve both the BBC and BDB. The company’s CEO, Ted Miller, said at the time that CTI was now naturally positioned to serve other countries’ programme makers which are keen to follow Britain’s lead.

An investment in the GSM network would represent a different proposition for CTI, but would tally with a strong emphasis in telecommunications infrastructure in other parts of the Crown Castle group.

“We have an overall strategy for Australasia and we’re looking at various infrastructure assets — and all the ones we’ve talked about fall into that category,” says Reese.

He confirmed he would be visiting New Zealand but could not say when. A spokesman for Broadcasting and Communications Minister Maurice Williamson said the minister was away at present and he knew of no planned or past meetings between the minister and CTI.

Meanwhile, Telstra has issued a statement to “clarify recent media reports with respect to a possible interest” in BellSouth New Zealand.

Telstra says it has indicated a preliminary interest in the BellSouth New Zealand business, is in the preliminary stages of assessing the opportunity and has submitted a confidential non-binding indication of interest.

“Management has not yet commenced due diligence and the company anticipates informing the market, as appropriate, of its further intentions,” according to the statement. “Telstra’s interest is part of its ongoing and regular review of investment opportunities that may be available globally to the company.”

Clear Communications, rumoured as the third bidder on the shortlist, is also describing a BellSouth purchase as one of a number of options being considered.

“Clear has always stated that mobility is important to us and we’ve always said we’re looking at a range of options,” says spokeswoman Anna Radford. “So based on that you could say we were considering Bell-South as one of those options.

“But we’re also taking a very serious look at the alternative wireless technologies, because we see wireless technologies as offering a leading-edge solution to a range of telecommunications services. We’ve purchased the LMDS spectrum and will be announcing our intentions for that — that can’t be applied to cellular, but that shows the direction we’re moving in.

“Of more relevance to cellular is the PCS spectrum auction coming up later this year. We’ve publicly signalled our interested in that and we’ve got a team of people looking at that.”

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