Former Mercury chief heads for Granada TV

Granada, the media and leisure giant, will next week announce the appointment of Duncan Lewis, former head of Mercury Communications, as the chief executive of its television operations. It will be the first time that a senior telecoms executive has run a major broadcasting group in the UK.

Confirmation of the appointment, expected next Tuesday, will coincide with the unveiling of a new management structure for Granada's television businesses, which include both Granada and London Weekend ITV companies.

Granada would not comment on the restructuring, but confirmed it would be addressing the staff of its television operations next week.

"We have no comment to make on internal or external candidates," Charles Allen, Granada's chief operating officer, said last night. Mr Lewis was unavailable for comment last night.

Mr Allen will become chairman of the television side next week when he takes over as group chief executive, Gerry Robinson, who currently holds that position, becomes group chairman, succeeding Alex Bernstein, who is retiring. Mr Lewis will report directly to Mr Allen, and in turn be responsible for the operating executives at Granada, LWT and the company's new cable and satellite arm.

A new name for the television operations will also be unveiled next Tuesday.

Mr Lewis, 45, left Mercury abruptly last September, after only nine months in the job. His departure shocked the City and the industry, as he had been credited with turning the telecoms company around. Mr Lewis was believed to have clashed with James Ross, then chief executive of Mercury's parent, Cable & Wireless, over the strategic direction of the group. It is thought that C&W had required Mr Lewis not to work in the telecoms industry for some months after he left.

Mr Lewis was also on the short list to become chief executive of Cable & Wireless after Mr Ross left in November. C&W was plunged into turmoil by a row between Mr Ross and Lord Young, then chairman, who also left the group. A successor for Mr Ross has yet to be announced.

Granada, which earlier this year clinched a pounds 3.8bn hostile bid for Forte, the hotels and restaurants group, is eager to underline its long-term commitment to television. Some analysts have suggested the Forte bid marked a shift away from the television and consumer equipment rentals interests which traditionally were the company's core.

The appointment of a telecoms executive underlines Granada's conviction that the communications and entertainment businesses are set for further convergence, following advances in technology.

In addition to the launch of satellite and cable services in the UK, the Government intends to encourage the development of digital terrestrial television and even video-on-demand services, offered via telephone and cable lines into homes and offices.

Many media analysts believe films and big sporting events could be soon be delivered by telephone on a pay-per-view basis, a prospect viewed as crucial to the long-term strategy of BT, the telecoms market leader.

Successful programme makers such as Granada are also expected to benefit from changes in the way entertainment is delivered to the consumer.

Mr Lewis's appointment may also be viewed as astute in the light of his experience running a company in competition with a dominant market player, in the form of BT. Granada has been eager to expand into cable and satellite entertainment services, a market currently dominated by Rupert Murdoch's BSkyB.

Hedging its bets, Granada recently unveiled a joint venture with BSkyB to launch five satellite channels, including a Granada Gold, dedicated to broadcasting hits from Granada's programme library.