France Telecom’s $1 billion investment in UK cable operator NTL (with a promise of "more to come") may have implications beyond the realm of cable TV and telecoms. Besides its cable franchises NTL has a considerable terrestrial transmission and satellite uplinking business, while France Telecom, apart from having its own terrestrial transmission business in France, also owns satellite services operator GlobeCast.

NTL was bought by Mercury Asset Management for Pounds 70 million in 1991, selling out to International Cabletel in 1996 for Pounds 235 million. NTL provides the national transmission system for commercial television in the UK. NTL chief executive Barclay Knapp has said NTL’s transmission business will be spun off into a new subsidiary later this year, though this is unlikely to include the satellite services division.

France Telecom also has its own terrestrial transmission business, trading as TeleDiffusion de France (TDF). TDF owns 20 per cent of Texas-based Castle Tower Communications (trading internationally as Castle Transmission International), which successfully bid for the BBC’s transmission business in 1991, paying Pounds 244 million. Castle Tower merged with Crown Communications in December 1997 and is traded under the holding company Crown Castle International Inc. For the three months ended March 31, 1999, revenues totalled $55.1 million, up from $11.8 million last year, with a net loss for the period of $19.9 million, up from $8.7 million. France Telecom bought $70 million-worth of CTI stock in June (5.5 million shares).

Last week (July 15) CTI increased its UK revolving senior credit facility from Pounds 64 million to Pounds 150 million ($236 million) saying "Pounds 100 million will be used to complete our digital terrestrial television (DTT) network build-out. The remaining Pounds 50 million is for future acquisitions, expansion and general corporate purposes." However, too close a link between CTI and NTL – via France Telecom – might attract the attention of the UK’s competition authorities.