Talks on US stake in Mercury break down

TALKS have broken down between Cable & Wireless and the US regional telephone operator, US West. The negotiations, which centred on the US company taking a 25 per cent stake in C&W's Mercury subsidiary for up to pounds 500m, would, if successful, have given Mercury important access to the British residential telecommunications market.

A link with US West would have strengthened Mercury's relationship with the UK cable television industry, in which US West is a leading player. Cable television companies are also allowed to offer telephone services and are seen by Mercury as the key to penetrating the home telecommunications market.

This year, talks between C&W and another US giant, AT&T, also failed. C&W declined to comment on the talks with US West, which is already Mercury's partner in setting up a mobile telephone service to compete with cellular radio.

At the same time, Mercury has announced the creation of 1,000 operator and customer services jobs in Manchester, the site of a new centre to serve residential customers. Two hundred staff will be in place early next year with the rest following by 1995.

Mercury hopes to have 2 million domestic customers by the end of the decade, compared with about 250,000 at present. Key to this strategy is the introduction at the end of this year of a system that will allow new customers on to the Mercury service without the need to program their telephones.