Computer giant Microsoft, which already has an effective 5 per cent holding in Cablelink's new owner, NTL, has snapped up a major stake in Britain's number two cable group.
Shares in Telewest Communications surged yesterday after Microsoft secured the stake from US cable firm MediaOne Group in a deal which was interpreted by analysts as one move in a longer-term game plan by the computer company that could help form one cable giant in Britain within 12 months.
Microsoft said the deal to buy 29.9 per cent of Telewest was part of a broader agreement to take a $5 billion (€4.63 billion) stake in AT&T Corp, the US's biggest long-distance phone company.
Microsoft has already paid $500 million for a 5 per cent stake in NTL, which is Britain's number three cable player, and some analysts believe it may now seek a deal with market leader Cable & Wireless Communications.
A merger among Britain's three cable groups would create a giant capable of serving 17 million homes and with enough clout to take on the Rupert Murdoch-controlled satellite television giant, BSkyB, and British Telecom.
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