Equipment manufacturer Blonder Tongue Laboratories Inc. has formed a joint venture with Priority Systems LLC and Paradigm Capital Investments LLC to acquire several thousand cable TV subscribers from Verizon Communications who reside in multiple dwelling units.
The joint venture entity, called Priority Systems Group LLC, intends to purchase the Verizon systems, which are comprised of approximately 4,350 existing subscribers and 9,500 passings.
Priority will pay $575 per subscriber, which Blonder Tongue will guarantee. The actual subscriber count and purchase price will be determined on the final closing date, which is anticipated to occur around Sept. 1, 2002. The Systems are expected to be cash flow positive in the first year.
Because the MDU segment of the cable television market suffers from high theft of service and high churn, Blonder Tongue intends to upgrade the buildings with its own equipment, including Triple QT digital and interdiction addressable signal control.
"After completing the upgrade, we will have a showcase and blueprint for all cable operators who want to deploy in the MDU environment and achieve the highest possible penetration, sell-through and customer satisfaction," claimed James Luksch, president and CEO of Blonder Tongue.
Priority Systems is privately owned and has been operating private cable systems and providing billing services since 1985. It has roughly 5,500 subscribers and provides billing services to 6,500 additional subscribers on behalf of other cable operators.