BBC Homepage World Service Education
BBC Homepagelow graphics version | feedback | help
BBC News Online
 You are in: Business
Front Page 
World 
UK 
UK Politics 
Business 
Market Data 
Economy 
Companies 
E-Commerce 
Your Money 
Business Basics 
Sci/Tech 
Health 
Education 
Entertainment 
Talking Point 
In Depth 
AudioVideo 



David Cleeverley of telecom consultancy Analysis
"Consumers will tend to purchase from only very few suppliers"
 real 28k

Monday, 30 April, 2001, 11:08 GMT 12:08 UK
AOL seeks UK cable alliance
NTL web site grab
NTL has the network, AOL Time Warner promises the content
The recently formed US media giant AOL Time Warner is in talks with UK cable firm NTL about a distribution alliance for content over high-speed broadband networks.

Prompted by press reports, the UK cable operator confirmed that it was talking to AOL, but warned that "while it is true that we are in the early stages of talks with AOL about some potential joint activity, apart from an outline term sheet nothing else has been agreed at this stage".

Spokespeople at both AOL and NTL insisted that the talks did "not imply that any particular agreement is imminent".

The New York Times newspaper had quoted people "close to the companies" as saying that AOL hoped to break into the European market by distributing its content across NTL's pan-European network. In exchange, the two firms would share revenue from broadband customers.

Linking up with AOL could put NTL in prime position to compete with rivals like BSkyB television.

NTL is the UK's largest cable television provider, with 8.5m customers. Across Europe, the firm reaches a total 20m households, with additional networks in Germany, France, Switzerland and Sweden.

Industry analysts say that AOL Time Warner is keen to expand its international operations, especially as the firm is threatened with a drop in advertising revenue because of the slowdown of the US economy.

Hope for international revenue

AOL Time Warner chairman Steve Case and chief executive Gerald Levin have said that they expected to make strategic investments in Europe this year.

This deal will not see AOL take a stake in the cable network operator. But it should boost international revenues. Currently they make up about 17% of AOL Time Warner's sales, but within 10 years Mssrs Case and Levin hope to raise this to 50%.

NTL, in turn, is eager to find fresh revenue streams itself. The company reached its current size only after going on an expensive buying spree. But buying up its competitors has burdened NTL with debt.

According to the New York Times, AOL Time Warner first hoped to strike a deal with the UK's former telecoms monopolist BT, but failed to get anywhere. BT has repeatedly been criticised for being slow with the roll-out of its broadband services.

Search BBC News Online

Advanced search options
Launch console
BBC RADIO NEWS
BBC ONE TV NEWS
WORLD NEWS SUMMARY
PROGRAMMES GUIDE
Broadband: What you need to know


Background:
See also:

03 Apr 01 | Business
UK behind in broadband race
29 Apr 01 | Business
Who rules Europe's net landscape?
18 Apr 01 | Business
AOL Time Warner profits rise
16 Apr 01 | Business
AOL surfs past 29m subscribers
08 Feb 01 | Business
BT's broadband 'disgrace'
08 Mar 01 | Business
NTL sticks with 2001 targets
02 Nov 00 | Business
NTL to axe 1,300 jobs
08 Mar 01 | Business
AOL could sign up with Napster
14 Jun 00 | Business
NTL bids for growth
29 Oct 00 | Business
NTL's low-cost surfing
Internet links:


The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories