Modern Times Group to acquire 80% Zitius stake

International broadcaster Modern Times Group (MTG) has signed an agreement to acquire 80% of Swedish open access communications operator Zitius Service Delivery from Quadracom for an undisclosed sum.

As part of the agreement, MTG has been given the option to acquire the remaining 20% of Zitius in 2016.

Zitius has fibre connected to 150,000 households in 10 cities via partnerships with local councils and real estate firms. Over 50,000 households subscribe to a service through the company’s network.

“Video is the primary driver of internet traffic and that demand is only growing. Zitius is a high growth market leader in a fast growing segment that also delivers attractive profitability levels. Our intention is to strengthen Zitius’ market leading position even further, and to continue providing attractive offerings to customers from multiple suppliers in an open environment. We will continue to market our own Viasat channels and Viaplay service to consumers through as many platforms as possible,” said Hans-Holger Albrecht, president and CEO of MTG.

Quadracom CEO, Roy Forslund, said that the deal was in line with the company’s strategy to enhance Zitius’ position as an independent operator of open access broadband networks in the country.

Sweden’s open access network structure is an open environment allowing multiple service providers to sign agreements with the network operator to market services to end consumers.

It is estimated that 750,000 homes are connected to open access networks in the country with the deployment and expansion of networks subsidised by the Swedish local and national government and the EU.

Zitius generated pro forma revenues of SEK 96 million for 2011, with SEK 14 million EDITDA.

In a seperate announcement today it was also revealed that Modern Times CEO, Albrecht, would be moving to telco Millicom to take the position of president and CEO. He will be replaced on September 15 by Jorgen Madsen, who has been a member of Modern Times' executive management team since 2000.