NTL hints at cable merger

NTL, the smallest of Britain's three main cable TV and telecoms system operators, turned up the heat on rival operators Telewest and Cable & Wireless Communications yesterday in an apparent bid to set the terms for a nationwide pounds 20bn merger of the companies.

Barclay Knapp, NTL chief executive, said betting on a three-way link- up "starts at 50/50." The remarks came as NTL released a statement drawing attention to its stronger performance in gaining and retaining customers.

Mr Knapp's intervention follows a newly launched pounds 40m marketing campaign that has promoted NTL in national newspapers and other media. Executives at Telewest and CWC, which are in merger talks, have privately expressed surprise at NTL's brand building media campaign.

Since Microsoft, which has a 5 per cent interest in NTL, agreed to buy a 29.9 per cent interest in Telewest, impetus for a sector-wide merger has grown. That outcome is being made more likely by Cable & Wireless, which is reverting to a focus on business telecoms, negotiating to sell its residential cable operation to Telewest.

Mr Knapp also announced that NTL would launch its digital cable TV service on 1 September - putting the Nasdaq-listed company several months ahead of its rivals. "We think we'll be able to get to a quarter of a million [subscribers] by next year," he said.