Canal Plus and FranceTelecom have signed a memorandum of understanding agreeing to combine theirFrench cable networks in a sign of further upheaval in the troubled sector.
The groups says that mergingtheir cable operations NC Numericable and France Telecom Cable, respectivelythe country's third and second largest networks, would "create the conditionsfor the necessary consolidation of the cable industry."
Both companies have spentmany months unsuccessfully trying to sell off their loss-making cable businessesand a pooling of their holdings is seen as a possible way of making thebusinesses more cost effective and attractive to investors. The memo is validuntil December and acknowledges that the businesses could be sold off.
The new company would have anetwork that passes 4.3 million homes and has 1.7 million subscribers.
The move comes only daysafter UnitedGlobalCom, part of Liberty Media, confirmed that it is to buy the50.1% controlling stake in leading French cable network Noos, that is currentlyowned by the Suez group, at a price of Euros508m-Euros660m.