Microsoft may buy as much as 30% of Cable & Wireless's cable TV business in a deal worth potentially $US4 billion, according to a report in the Wall Street Journal.
Greg Maffei, Microsoft's chief financial officer and C&W Chief Executive Officer Graham Wallace talked over the deal this week, the Journal report said. Officials at the companies could not be reached immediately for comment.
The deal, if true, advances Microsoft's already clear push into cable networks.
In January of this year, Microsoft took a 5% stake in another major U.K. cable operator, NTL , for $500 million, with both companies agreeing to develop broadband services aimed at U.K. customers. The deal required NTL to commit to using Microsoft's set-top box software.
Microsoft won a major commitment to its set-top box software last week when the vendor made a $5 billion investment in AT&T. The U.S. carrier said last week that it intends to increase its present commitment to use Microsoft's Windows CE operating system in 5 million of its set-top boxes to an extra 2.5 million to 5 million devices.
The deal with AT&T also means that Microsoft will acquire a 29.9% stake in MediaOne Group Inc.'s Telewest Communications PLC, another one of the trio of leading U.K. cable operators. Should Microsoft go ahead with the C&W arrangement, the software giant will hold stakes in all three main cable companies in the U.K., the Journal report said. MediaOne accepted an AT&T acquisition offer valued at about $60 billion last week.
The UK cable market is somewhat ahead of the US and so could provide a good trial facility for services, the report added.
Microsoft, in Redmond, Washington, can be reached at +1-425-882-8080 or at http://www.microsoft.com/. Cable & Wireless, in London, can be reached at +44-171-315-4000 and on the World Wide Web at http://www.cwplc.com/.