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Monday, March 22, 1999 Published at 15:41 GMT

Business: The Company File

Cable giants switch on to $60bn merger

Casting a shadow on its cable competitors

Two of the largest cable companies in the US are joining forces in a $60bn deal.

Comcast, which controls the home shopping channel QVC, has bid for MediaOne in a deal which will create a giant in the cable industry serving 11 million customers.

The two companies generated a total of more than $8bn in revenues last year.

Comcast-MediaOne will also be one of the world's biggest providers of broadband communications, designed to carry large amounts of data and speed access to the Internet.

[ image: Comcast has gone shopping]
Comcast has gone shopping
The new group will also provide a significant force to rival the cable businesses of AT&T and Time Warner.

Philadelphia-based Comcast also owns the National Hockey League's Philadelphia Flyers; the National Basketball Association's Philadelphia 76ers; and stakes in the E! and Golf Channel cable networks.

As well as being a major US cable group MediaOne, based in Englewood, Colorado, has interests in wireless communications businesses outside the US serving more than three million customers.

Industry shake-up

MediaOne has been seeking a media partner after being spun off by telecom operator US West last year.

It has recently teamed up with Time Warner to create a high-speed Internet venture called Road Runner.

The deal could have important consequences for two UK companies.

MediaOne owns significant stakes in UK cable group Telewest and mobile phone company One2One - both of which could be off-loaded as a result of the merger.

The boards of both US companies have unanimously approved the deal.

The deal is likely to give fresh impetus to cable share prices.

Bandwidth wars

Behind the merger lies a battle for control of the converging world of telecommunications, television and the Internet.

The move follows AT&T's recent takeover of cable operator TCI, the biggest in the USA. That created a formidable group that gave the leading long distance telephone company access to local networks and high speed Internet connections.

In a separate move, NBC, the US television network which owns Internet portals Snap! and CNET, said it would offer a free high-bandwidth version on its site, allowing improved viewing of multimedia applications like video.

The connection will use Digital Subscriber Line technology, a rival to high speed fibre optic cables, which allows the use of ordinary telephone lines to achieve modem speeds of up to 100 faster than existing connections.

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