Cable Giants Begin Merger Talks
Cable giants ntl and Telewest have begun merger talks, according to reports this morning, in a move which will create the first real challenge to Sky’s dominance of the multi-channel television market in Britain.
The two companies’ consolidation will create a communications firm with annual revenues of around £3.3 billion, and around five million customers. However, the £5.5 billion merger has yet to be given the green light by competition watchdogs.
It is widely expected that any merger between the two cable companies will escape competition legislation unscathed, as their respective subscriber bases do not overlap or compete in any area of the country.
Both ntl and Telewest have now hired financial advisors to help complete negotiations, which are currently described as “early-stage merger talks” in a report by Reuters.
Rumours of a merger between ntl and Telewest have circulated frequently over recent years, but these have intensified with the recent restructuring of both companies, coming to a head last month (see Cable Giants Mull Merger To Tackle Sky).
If successful, a merger between the gable giants would place them in more active competition with both Sky and British Telecom, with the combined company able to provide a “triple play” service of phone, internet and television.
The two companies have also begun the roll-out of their first on-demand film and TV services, allowing customers to watch content at their leisure, and to pay for additional films and programmes at the touch of a button (see Cable Giants Launch On-Demand TV And Movie Services).
Elsewhere, both companies have begun trials of technology which could eventually match, or even exceed that provided by Sky, with ntl testing its first high definition TV services (see NTL Trials High Definition TV With Ultra Fast Broadband) and Telewest beginning roll out of a dedicated cable personal video recorder, designed to tempt customers away from Sky’s premium Sky+ service (see Telewest Targets Sky With PVR Set-Top Box).
NTL: 01256 752000 www.ntl.com Telewest: 0845 142 0000 www.telewest.co.uk