Microsoft Corp is to invest $500m in NTL Inc, the UK cable company and telecoms operator. The investment is part of an agreement announced yesterday to jointly develop a new broadband network in the UK and Ireland. The money will be used to accelerate NTL’s deployment of high-speed voice, video and data services over its national fiber-optic telecommunications network and to continue NTL’s introduction of advanced internet, telephone and cable television services, the companies said in a joint statement. Under the investment deal, the software giant will receive 5.25% Convertible Preferred NTL stock worth $500m, which is convertible to common stock at a price of $100 per share. In addition Microsoft will receive a further 1.2 million five-year warrants to purchase NTL common stock at a price of $84 per share. Microsoft has made a series of investments in cable and telecommunications companies over the past two years. The first and largest investment was made in April 1997, when Microsoft sunk $1bn in an ill-fated embrace of ComCast that soon saw the two companies quarreling over set top box standardization. The present investment is Microsoft’s first, and quite probably not last, venture into Europe. The companies said they would be working closely to develop new digital services and expected to be announcing further agreements regarding software and services throughout 1999. A spokesperson for Microsoft said that cooperation between the two companies would very likely mean the implementation of Microsoft’s Windows CE system in NTL’s set-top boxes.
