Microsoft may buy as much as 30 per cent of Cable & Wireless' cable TV business in a deal worth potentially $US4 billion, said a report in yesterday's Wall Street Journal.
Greg Maffei, Microsoft's chief financial officer and C&W chief executive officer Graham Wallace talked over the deal on Tuesday, 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 per cent stake in another leading UK cable operator, NTL Inc, for $500 million, with both companies agreeing to develop broadband services aimed at UK customers. The deal required NTL to commit to using Microsoft's set-top box software.
Microsoft won a commitment to its set-top box software last week when the vendor made a $5 billion investment in AT&T. The US carrier said last week that it intends to increase its present commitment to use Microsoft's Windows CE operating system in 5 millionof 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 per cent stake in MediaOne Group's Telewest Communications, another one of the trio of leading UK 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 UK, 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.