UnitedGlobalCom has agreed to acquire NTL’s operation in the Republic of Ireland, a move seen as facilitating the anticipated merger of the NTL and Telewest cable networks in the UK.

The acquisition was enabled by investment bank Morgan Stanley, which acquired the operation on behalf of UGC through a holding company, in a deal worth around 325 euro.

Meanwhile it is not clear whether Telewest is ready to sell its Flextech content arm, which operates a number of channels and has a 50% interest in the UKTV joint venture with the BBC.

It seems that NTL and Telewest could be clearing the decks for a proposed merger that has long been anticipated. Both companies operate in different franchise areas in the UK and a merger would enable them to compete more efficiently with satellite services. Neither company is commenting on reported merger plans.

Announcing results for the first quarter of 2005, NTL said its loss from continuing operations narrowed to £62 million as it added 32,800 subscribers. Commenting on the results, Simon Duffy, the chief executive of NTL, said the sale of its operations in the Republic of Ireland left the company “well positioned for the next stage of our development”.

Announcing its first quarter results, UGC reported revenue in Europe up 50% to $711 million, primarily as a result of its ‘triple-play’ services. The company says it is poised for a rapid expansion of digital phone services running over internet protocols and will aggressively increase broadband speeds across Europe. It also plans to migrate cable customers to digital in the Netherlands, deploying over 2 million new set-top boxes.