TV cable firm cuts losses

CABLE operator Ntl today said its record of holding on to customers was improving after it cut losses by 17.1% in the first three months of the year.

Ntl said 32,000 more subscribers signed up for services between January and March than were lost and its rate of churn had fallen to 1.4% - its lowest level for nine months.

Losses from continuing operations narrowed to £62.6m from £75.5m a year ago as speculation mounts that the firm is ready to open merger talks with rival Telewest.

Ntl said revenues of £517.3m were nearly 1% ahead of a year ago and benefited from an increase in sales of cable services to households.Consumer revenues rose 4% to £384.5m on a year ago as a growing band of people hooked up to digital TV and 17% more subscribers took its 'triple play' package of telephone, television and internet than a year ago.

But sales of voice, data and other services to businesses fell 10.1% to £113.6m - mainly due to the purchase of virgin.net in November which turned one of its customers into a subsidiary.

Ntl - based in Hook, Hampshire, but listed in New York - emerged from bankruptcy protection in 2003 and began a major financial overhaul to generate new capital and reduce interest repayment charges. It organised a rights issue to raise £824.3m and trimmed its workforce, with 1,500 call centre staff losing their jobs in cuts announced in July last year.

The group completed the sale of its broadcast business on 31 January, leaving it with a single cable business. This ensured it made a net profit of £456.1m in the first quarter against a deficit of £65.4m a year ago.

Reports at the weekend said Ntl has asked Goldman Sachs to advise it on its long-awaited £5.5bn merger with Telewest as it kicks off moves to create a strong rival to satellite broadcaster BSkyB.

It is understood that Telewest and Ntl have been drawing up plans for the management structure of the two companies, with formal talks likely to begin next month. Ntl chairman Jim Mooney and chief executive Simon Duffy are expected to continue in their respective roles at the enlarged company, with Telewest chairman Cob Stenham likely to stay on as deputy chairman.

The group announced yesterday that it will sell its telecoms operations in the Republic of Ireland for €325m (£222.2m) - a move that many analysts believe has removed a major hurdle in the way of merger talks.