C&W merger deal sparks cable industry shake-up

Mercury Communications, Nynex, Bell Cablemedia, and Videotron are likely to disappear and be replaced by a single branded company, following the announcement this week of a merger of the groups into one company – Cable & Wireless Communications.

The deal puts Cable & Wireless Communications ahead of TeleWest as the UK’s biggest communication service provider with 6 million homes in its franchise areas. Cable & Wireless will have a 52.6 per cent share of the company, Nynex will have 18.5 per cent and Bell Canada International 14.2 per cent. The other 14.7 per cent will go to public shareholders.

C&WC will have 466,000 cable TV homes compared with TeleWest’s 487, 079 out of a total 3.7 million homes where cable has been passed (laid).

The companies involved in the merger are remaining tight-lipped on their future.

“What we are talking about is a very complex deal. The mechanics of bringing these large companies together and forming a new entity, its structure and all the specific details could take months to sort out,” says Bell Cablemedia spokes-man Denise Lewis.

She says there has been no firm decision made on whether the individual companies will drop their identities as part of the merger.

However, a senior telecoms analyst says the brand names will disappear.”Cable & Wireless will in time sit down and develop a separate brand,” he says.

Cable & Wireless has dropped the Mercury name from the One2One mobile phone brand in its latest TV advertising campaign which launched this month.

C&WC will provide local, national and international data as well as mobile telecommunications, multichannel TV and Internet services.

Cable & Wireless spokesman Peter Eustace says it is too early to announce any redundancies as a result of the merger. But he adds there will be some “rationalisation”, as one of the benefits of the merger is significant savings through the elimination of duplicated services.

Eustace says there has been no decision on the advertising arrange-ments for C&WC. HHCL & Partners handles the bulk of advertising as the roster agency for Mercury Com-munications’ 6m account.

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