The acquisition of Welho is the latest indication that DNA has firmly set its sights on expanding further into the Finnish pay TV market. Late last year, DNA acquired national level licenses to provide HD services on the DTT network. DTT services are currently being trialled, with commercial launch set for later this year. To coincide with the DTT launch, DNA expects to launch several joint marketing initiatives to push HD services via both cable and DTT.

The merger of the two networks will see DNA control just over 590,000 cable TV subscribers, including the much sought after Helsinki region. With a combined market share of over 43 per cent in the cable TV sector, DNA will be in a much stronger position to take on competitor telcos Elisa and Sonera. Roughly 300,000 households will also take broadband services from the operator, with the combined company accounting for roughly 70 per cent of the cable broadband market. Network overlaps between the two companies will be minimal for both cable based and fixed line (DSL) services and as a result, Welho management are confident that the sale will receive approval from both the government and competition authorities.

The sale of Welho to DNA will see Sanoma focusing its efforts on its on-line and television content services. Sanoma Entertainment, to which Welho belongs, owns a stable of TV and radio channels including the much viewed free-to-air channels Nelonen and Nelonen HD. Although Sanoma has indicated that it sees itself as being a strategic long term partner in DNA, conditions of its stake acquisition does not include a minimum holding period - giving Sanoma the option of divesting its stake and exiting the pay TV infrastructure business completely. However, given its increasing focus on content, the advantages of having unfettered access to the distribution channels via DNAs cable network without having to bear the associated overheads will definitely be a factor to consider should it choose to exit the venture.