Telewest fails with NTL

UK cable operator Telewest has failed to become the dominant UKeak down. operator following the breakdown of merger talks with rival operator NTL.

The announcement follows almost a year of talks between the two operators who, in the meantime, have been busy acquiring franchises.

Earlier this year, Telewest bought General Cable for #630m, while NTL purchased Comcast for #360m.

Most recently, NTL bought Comtel and Diamond Cable for a total of #1.4bn in cash, stock and debt last week.

The Comtel and Diamond Cable acquisitions by NTL are believed to be the reason behind Telewest's announcement. A Telewest spokesperson said: "It would appear that both sides have decided to do something on their own following NTL's recent acquisitions and our purchase of General Cable earlier this year."

Following its latest purchases, NTL now boasts around a quarter of the UK market, plus 85,000 business telephony lines. For approximately $630m, Diamond will provide NTL with a franchise that will cover 1.2 million homes and businesses around the east Midlands.

The Comtel deal, worth #550m, will enable NTL to expand its coverage in south east England. Comtel has access to 991,000 homes and 2,600 business telephony customers in the technologically advanced Thames Valley region.

The director general of fair trading is, at present, considering whether the NTL acquisitions should be investigated under the Fair Trading Act.

The UK cable market has consolidated down to three main players - Cable & Wireless Communications, Telewest and NTL - but a slowdown is expected on further mergers.

"All three big players have a lot to do digesting what we have got already to get BT traffic carried on our own networks," said Alan Hindley, group managing director for businesses at NTL.