'Millionaires firm' that came from nowhere: Privatisation is criticised for selling state assets to sole bidder. Chris Blackhurst reports

NATIONAL Transcommunications is one of those telecommunications companies that seem to have come from nowhere in a very short space of time. Except that unlike most of its other high-flying rivals, according to its critics, NTL has been the beneficiary of government largesse.

Chaired by the shrewd Arthur Walsh, the former chief of STC and managing director of Marconi, NTL has cornered the market that few thought exciting a few years ago: transmitter masts. As a result, while others ploughed all their energy and millions into developing the more fashionable fibre optical cables, NTL has concentrated on sending messages through the air.

Whether the Government should have perceived the way the industry was headed and how it would be possible, using radio technology, to use the towers as the basis for a cheap trunk call phone network, is another matter. Certainly, there were at least two other potential bidders for the IBA transmitters three years ago. One, a consortium of Mercury Communications and French Telecom, never got off the ground. Another, from GEC, also evaporated.

In the end, to the surprise of John Forrest, NTL's chief executive, there was just his company. A price of pounds 70m for 500 masts that, according to industry insiders could cost pounds 150m to replace, looked a good deal. Not too good: a report into the sale from the National Audit Office, the public spending watchdog, said the Government had not erred. Despite the subsequent non-appearance of other bids, the sale, said the NAO, had been competitive. But critics, led by Alan Simpson, Labour MP for Nottingham South, point out the NAO report was produced in agreement with the Home Office and when it was obvious only one firm was involved, the Government should have postponed the privatisation.

Instead, said Mr Simpson, it went ahead, and NTL got a bargain. If the BBC masts also go to NTL, this small, three-year-old company will have a lucrative stranglehold over Britain's terrestrial broadcasters.

Mr Simpson's concern lies not just with the TV masts but also with the sale to the company earlier this year of the Home Office's mobile communications network. Most radio calls from police, ambulance and fire services go through the old Department of Telecommunications or DTELS, now part of NTL.

Despite relocating less than two years ago to Mr Simpson's Nottingham constituency, the Government pressed ahead with selling the business to a company that made no secret it would close the new offices and move the staff back south. Some of them, admitted Mr Forrest yesterday, would inevitably lose their jobs. 'We said we didn't want it (the new Nottingham headquarters) in our bid to the Home Office,' he said. There would be some redundancies, he added.

Mr Simpson said the sale to a company that was closing new offices 'was a tragic betrayal of commitments given to the staff when they came to Nottingham'.

(Photographs omitted)

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