Outlook: AT&T might untangle the cable knot

THERE'S NEVER a dull moment in the telecommunications industry. No sooner have Telecom Italia and Deustche Telekom lumbered up the aisle intent on redrawing the telecoms map of Europe, than along comes a deal which promises to carve up a significant part of the UK market too.

This time the elephants doing the dancing are AT&T, the daddy of them all, and MediaOne, the US cable operator.

Such is the frenzy of merger activity in the US as the various players jockey for pole position in the information age, that MediaOne was already betrothed to Comcast. Now freed from the constraints of yesteryear, AT&T is desperate to recreate the empire that was broken up when the local phone companies, the Baby Bells, were forcibly spun off.

It has already acquired America's second largest cable operator, TCI. Snapping up MediaOne would make AT&T a major player in both the local and long-distance US telephone markets. There are, of course, a few loose ends to tie up. First, it needs to arrange $30bn of debt financing. Even for a company like AT&T that is a big bite, following so soon after the $60bn TCI deal. Then it needs regulatory approval.

And then, finally, there is the matter of the two transatlantic orphans that AT&T will inherit as part of the deal - a 50 per cent stake in One2One, and a controlling 51 per cent stake in Telewest. Both fit the category of non-strategic assets. Furthermore, both have to be disposed of anyway because of the non-compete agreement that AT&T has with BT - something, incidentally, which the regulators might care to cast an eye over while they are at it.

One2One was already on the block following the decision by Cable & Wireless, the owner of the other 50 per cent, to become Cable but not Wireless. As for Telewest, the incestuous nature of the UK cable industry and the desperate need of the various players to make a viable whole out of the loss-making parts, means it was never likely to remain in its present form.

The welter of overlapping cross shareholdings make the UK cable market a tricky one to keep up with. C&W also owns a 53 per cent stake in Cable & Wireless Communications, itself the product of a four-way merger. Comcast (remember that one) meanwhile owns a stake in NTL, the other player of any size on the UK cable scene.

A consolidation of the three big cable players into one ought not to make the regulators lose any sleep since they do not compete with one another anyway. What's more, it would make everyone else's life easier. The AT&T bid may just be the catalyst the industry needs.

News
news
Voices
voicesThe Ukip leader on why he's done nothing illegal
Arts & Entertainment
artYouth club owner says mural is 'gift from the sky' so he can prevent closure of venue
News
science
VIDEO
News
Plans to decriminalise non-payment of television licence fees would cost the BBC £500m according to estimates drawn up within the Corporation
people
News
people
Life & Style
The new low cost smartphone of Motorola, 'Motorola Moto G', is displayed in Sao Paulo, Brazil on November 13, 2013. The smartphone, with dimensions 65.9mm W x 129.9mm H x 6.0 - 11.6mm D is equipped with a Qualcomm Snapdragon 400 with quad-core 1,2 GHz CPU, a 4.5-inch display and Android Operating System 4.3 and a suggested price of $ 179 USD.
techData assessing smartphones has revealed tens of millions of phones are at risk of being harvested
Arts & Entertainment
Jessica Pare as Megan Draper and Jon Hamm as the troubled, melancholy Don Draper
tvAnd six other questions we hope Mad Men series seven will answer
Arts & Entertainment
Cody and Paul Walker pictured in 2003.
film
Have you tried new the Independent Digital Edition iPad app?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Data Analyst - Financial services, Client data, LEI

£40000 - £50000 per annum + BONUS + BENEFITS: Harrington Starr: A leading, Cit...

Management Consultancy - Operational Research Analysts

£35000 - £50000 per annum + Bonus + Benefits: Pro-Recruitment Group: You must ...

Corporate Actions Consultant - Market data, ISO15022, presales

£45000 - £60000 per annum + BONUS + BENEFITS: Harrington Starr: Corporate Acti...

Prudential Risk/Operational Risk Associate - London

£350 - £400 per day: Harrington Starr: An opportunity has arisen at a FCA regu...

Day In a Page

Homelessness: Why is the supported lodgings lifeline under threat?

Why is the supported lodgings lifeline under threat?

Zubairi Sentongo swapped poverty in Uganda for homelessness in Britain. But a YMCA scheme connected him with a couple offering warmth and shelter
A History of the First World War in 100 Moments: When the world’s biggest shed took over Regent’s Park

A History of the First World War in 100 Moments

When the world’s biggest shed took over Regent’s Park
The pain of IVF

The pain of IVF

As an Italian woman vows to keep the babies from someone else’s eggs, Julian Baggini ponders how the reality of childbirth is often messier than the natural ideal
Supersize art

Is big better? Britain's latest super-sized art

The Kelpies are the latest addition to a growing army of giant sculptures. But naysayers are asking what a pair of gigantic horse heads tells us about Falkirk?
James Dean: Back on the big screen

James Dean: Back on the big screen

As 'Rebel without a Cause' is re-released, Geoffrey Macnab reveals how its star perfected his moody act
Catch-22: How the cult classic was adapted for the stage

How a cult classic was adapted for the stage

More than half a century after it was published 'Catch-22' will make its British stage debut next week
10 best activity books for children

10 best activity books for children

Keep little ones busy this bank holiday with one of these creative, educational and fun books
Arsenal 3 West Ham United 1: Five things we learnt from the battle between the London sides

Five things we learnt from Arsenal's win over West Ham

Arsenal still in driving seat for Champions League spot and Carroll can make late charge into England’s World Cup squad
Copa del Rey final: Barcelona are paying for their complacency and not even victory over Real Madrid will put things right

Pete Jenson on the Copa del Rey final

Barcelona are paying for their complacency and not even victory over Real Madrid will put things right
Rafa to reign? Ten issues clay courts will serve up this season

Rafa to reign? Ten issues clay courts will serve up this season

With the tennis circus now rolling on to the slowest surface, Paul Newman highlights who'll be making the headlines – and why
Exclusive: NHS faces financial disaster in 2015 as politicians urged to find radical solution

NHS faces financial disaster in 2015

Politicians urged to find radical solution
Ukraine crisis: How spontaneous are the pro-Russian protests breaking out in Ukraine’s east?

Ukraine crisis

How spontaneous are the pro-Russian protests breaking out in Ukraine’s east?
A History of the First World War in 100 moments: The first execution at the Tower of London for 167 years

The first execution at the Tower of London for 167 years

A history of the First World War in 100 moments
Fires could turn Amazon rainforest into a desert as human activity and climate change threaten ‘lungs of the world’, says study

New threat to the Amazon rainforest:

Fires that scorch the ‘lungs of the Earth’
Liverpool, Chelsea and Manchester City: And the winner of this season’s Premier League title will be...

Who’s in box seat now? The winner of the title will be ...

Who is in best shape to take the Premier League prize?