NTL buyers plan to cut costs at cable firm

STAFF at NTL Ireland face an uncertain future after the cable TV operator’s new owner said it would strip costs from the company but that it was “too early to say” whether job losses would be involved.

US cable giant UGC, which published first-quarter results yesterday, said it expected to deliver “meaningful synergies” from its planned merger of NTL Ireland with Chorus, its other Irish cable business.

The €325 million deal, which was announced earlier this week, is subject to clearance from the Competition Authority. The deal, if approved, will give UGC control over cable TV networks in Dublin, Waterford and Galway, where NTL currently operates, as well as in Chorus’s strongholds of Cork and Limerick and other major cities and towns around the country such as Kilkenny, Clonmel and Naas.

NTL’s British parent, which also reported first-quarter figures yesterday, said the sale proceeds would be used to repay debt. The deal involved a complex structure that will allow NTL get its hands on the sale proceeds immediately, without waiting for the Competition Authority’s decision.

NTL sold the Irish division to a subsidiary of Morgan Stanley, the investment banking heavyweight that advised UGC on the takeover. Morgan Stanley will sell the business to UGC as soon as competition hurdles have been cleared.

Yesterday’s results showed NTL Ireland increased its quarterly revenues by almost 10% year-on-year. Revenue for the three months to March climbed to €27.8m on the back of strong subscriber numbers, higher rates and increased take-up of more expensive digital TV services.

The number of digital TV customers rose 31% to 102,000, while NTL’s total customer base grew by 2,400 to top 350,000.