Hollick rules out cable merger

The cable industry was dealt a fresh blow yesterday after it emerged United News & Media, Lord Hollick's media conglomerate, had ruled out joining merger talks with cable operators Telewest and NTL. Separately, NTL also announced a large restructuring which will mean the loss of 50 jobs.

United had been courted by NTL's head, Barclay Knapp, as part of a plan to merge with Telewest to create a rival to Cable & Wireless Communications, the UK's largest cable company. However, a source close to United said yesterday: "United never had any intention of joining the talks."

City observers said United's presence in the merger would have given the consolidated group greater clout, and would have added impetus to the rationalisation of the industry.

NTL, which announces its second-quarter results this morning, said it was merging its three customer operations departments into one over the next six months. Its Fleet office will also be absorbed into offices in Farnborough and Guildford.

A spokeswoman for NTL said last night that upwards of pounds 1m would be saved by the job cuts and reorganisation of the business. She added that further cost cuts and redundancies could not be ruled out, and that some of the 50 redundancies announced yesterday would be senior positions.

The news comes just one week after Telewest, the second biggest UK cable company, said it was to slash 1,400 jobs, a quarter of its workforce. The company also said it would slow down its investment spending and would inject more funds into marketing.

The cable industry has come under fire from the City in recent months as the number of customers signed up has failed to increase as fast as anticipated.

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