Struggling Telewest and ntl companies set for merger talks

Telewest and ntl should merge as soon as possible if there is to be any hope of cable becoming a viable proposition, industry experts say.

After the departure last week of Adam Singer, the Telewest chief executive, his successor, Charles Burdick, is expected to start talks with his counterpart at ntl, Barclay Knapp. Both companies are saddled with debt from building the cable infrastructure, while cable has as yet failed to increase significantly levels of penetration.

Telewest is restructuring to reduce its debt and is expected to sell its 17 per cent share in Scottish Media Group, the owner of the ITV franchises Scottish TV and Grampian TV and of Virgin Radio.

Ntl is involved in Chapter 11 proceedings to protect it from going into administration, but it is expected to emerge from this shortly. However, Mark Palmer, a managing partner at OMD UK, thinks it may be too late. "Although the ultimate logic is that cable should be a single brand position and it should be structured as one proposition, ntl and Telewest need to worry about utility companies such as British Gas, who could provide better customer service, becoming involved, he said.

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