Cable & Wireless is considering entering into a partnership with Telewest and NTL to create a national Internet service provider in Britain.
Spokesmen for C&W and Telewest said the companies, Britain largest and second-largest cable operators, respectively, are considering forming a joint ISP which could offer Internet access through cable modems, Bloomberg News reported.
The spokesman said that this is just one option among several the companies are examining. No agreement has yet been signed.
All three companies already provide Internet access over traditional telephone lines, but C&W and Telewest have said they have plans next year to introduce cable modems for Internet access.
Bloomberg reported that Charles Burdick, Telewest's financial director, told The Independent, a British newspaper, that the three companies are looking to create a single ISP "which would allow us to share costs, expertise, and brands."
Cable modems are nearly 100 times faster than traditional phone lines and more affordable to consumers and small businesses.
New York-based NTL, the third largest cable operator in Britain, did not respond to requests for comments.
C&W reported it had 33,000 Internet customers at the end of March; Telewest said it had almost 20,000 at the end of June. Scottish Power's Demon Internet and British Telecommunications' BT Internet have 180,000 and 150,000 Internet customers, respectively.
"There's been a consolidation going on among Internet providers just as in the States," Tony Clifford-Winters, a senior analyst at Bloor Research, told Bloomberg. He added that cable companies have not been competitive in the Internet market. "It sounds like a spectacular idea."
Bloomberg contributed to this report.