NTL Cabletel, one of the companies seeking to acquire Cablelink, has announced annual revenues of $1 billion (€930 million) to the end of December 1998. Following a number of key acquisitions and aggressive growth, the largely UK based company now lies second in the UK broadband telecommunications market.
Over the year NTL increased its telephone, television and Internet customer base from 400,000 to 1.3 million. The last quarter was NTL's second best on record, adding more than 41,000 to its subscriber base, and reducing its "churn" rate - where customers defect to another provider for no apparent reason - to less than 10 per cent.
NTL has expressed an interest in the Cablelink service since the Government originally announced its sale. Reports of its value vary, but Cablelink, which has 350,000 customers, is expected to sell for up to £400 million (€507 million). A further infrastructure investment of around £120 million will also be required.
Mr Owen Lamont, managing director of NTL Ireland, says the Republic still represents a "very exciting market", but NTL adopts a policy of not discussing its plans in advance of its actions.
NTL has been active in the Republic over the last year, and recently completed a £30 million, high-speed, Britain-Ireland fibre-optic link. It has also invested £600 million in a complete fibre optic network to service 80 per cent of Northern homes by 2003.
By connecting Ireland to its broadband telecommunications backbone in the UK, it has completed a very powerful high speed ring for the transmission of data to any point within the Republic, Northern Ireland and the UK. Any break that might occur in the ring will automatically redirect traffic in the other direction, eliminating disruption of service.
Significantly, Microsoft recently invested $500 million in NTL, amounting to a 5 per cent stake in the company. At the time the deal was hailed as a collaboration to ultimately offer a range of broadband services in the UK and Ireland.
Such an offering in the Republic would depend on NTL having a residential customer base, making Cablelink a highly attractive acquisition target for the company. Over the past year NTL acquired Comcast UK, ComTel and Diamond Cable, and raised over $2.7 billion in the capital markets in 1998.
