NTL, the UK's third largest cable operator, has snapped up Comcast UK, a Cambridge and Teesside cable company, in a deal valued at $600 million.
The acquisition is the latest in a string of consolidations in the UK cable industry, which numbered more than 25 operators five years ago.
The deal raises a number of questions, including the future of reported discussions between NTL and the UK?s second largest company in this area, Telewest. The two were reported to be in merger talks in April - deal that would create an organisation with a potential subscriber list of seven million homes.
A Telewest spokesperson would not confirm or deny that the two companies are in talks but said the latest merger adds a curious twist to the tale.
Telewest and Comcast jointly own two cable operations - Cable London and Birmingham Cable. The spokesperson said Telewest could exercise its rights to acquire Comcast?s stake in the two firms. Comcast holds 50 per cent of Cable London, with Telewest owning the other half. Meanwhile Comcast owns 27.45 per cent of Birmingham Cable while Telewest also holds 27.45. The remainder is owned by General Cable.
Comcast UK Cable Partners is the UK subsidiary of Comcast Corp, the US? fourth largest cable television operator. Last year Microsoft invested $1 billion in the parent company to help fund its efforts to bring high speed multimedia into millions of homes.
In the UK Comcast has around 1.1 million homes under franchise. As of September 1997, Comcast UK had passed approximately 660,000 homes and had approximately 210,000 residential telephony customers, 160,000 residential cable television customers and 6,600 business telephony customers.
NTL serves six regions in the UK. It also offers a national telecomms service.
Barclay Knapp, NTL chief executive, said: ?This acquisition represents a significant step toward increasing the value of NTL and achieving our objective of becoming the premier communications company in the UK.?
The industry is undergoing a huge consolidation with the main objective being to create a truly national service. According to the recent survey by the Telecommunications Managers? Association, cable operators could be a viable alternative to fixed wire operators but as yet they are too regional.
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