Cable Giants Mull Merger To Tackle Sky
Reports this morning suggest an imminent consolidation of the UK’s cable TV industry, with operators Telewest Global and ntl believed to be preparing a £5.5 billion merger.
The move would create a more unified rival to BSkyB’s dominant digital satellite service, with ntl employing Goldman Sachs to advise on the planned merger, according to today’s Times newspaper.
Meanwhile, Telewest executives are understood to be meeting with investment banks in New York this week to choose an adviser.
The Times’ report, although lacking named sources, claims that Cob Stenham, chairman of Telewest, hopes to see the merger with ntl progress quickly. The newspaper states that formal talks are likely to begin next month. Neither Telewest or ntl were available for comment on the report, however.
According to the latest figures from media regulator, Ofcom, Sky commands a 30.8% share of all digital households in Britain, compared with 18.5% for Freeview and 10.1% for cable. However, many believe that the capacity and nature of cable networks will enable them to offer more advanced services than Sky in the future, thus making them a safer bet for the long-term.
Speaking at the recent MediaTel Insight Digital TV Seminar, media commentator and journalist, Ray Snoddy, said: “Cable around Europe is starting to take off again, most of the cable companies have sorted their finances and believe that triple play, the ability to offer television, telephone and broadband, has finally arrived. They believe that they have the ability to offer it better than anyone else.”
He continued: “A recent cable industry in Europe has found that they were thinking of offering maybe a 100 megabit service, which would make the current one or two very paltry indeed, and using that capacity to offer high definition television.”
Ntl has already begun testing its first high definition TV services via new ADSL2+ technology, allowing massively increased connection speeds without the need to install expensive fibre optic lines to customers’ homes (see NTL Trials High Definition TV With Ultra Fast Broadband).
Ntl states that trials of high definition TV services have been running since February, and that there is potential for broadband internet speeds of over 18Mbps using existing copper phone lines, a 600% increase in speeds for even the company’s top tier broadband customers, currently accessing the internet at 3Mbps.
Elsewhere both ntl and Telewest have begun to roll out video on demand services, something which Sky has yet to do and is currently only provided in London by IPTV firm, HomeChoice. The new service allows Telewest’s digital cable customers in Bristol to view films provided by FilmFlex at their leisure, while ntl customers in Glasgow were be the first to try its on-demand TV service, dubbed ntl On Demand, in January (see Cable Giants Launch On-Demand TV And Movie Services).
NTL: 01256 752000 www.ntl.com Telewest: 0845 142 0000 www.telewest.co.uk