Cable & Wireless Communications
last month bought MCI
entire Internet holdings for $1.75 billion, is considering
entering into a partnership with Telewest Communications
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
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.