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US WEST SEPARATES ITS CABLE AND TELCOMS COMPANIES

Breaking with the trend toward convergence between telecoms carriers and cable services US West Inc is to split its phone and cable television operations into two companies from the middle of next year in a move that the company says will allow the new companies to pursue alliances and partnerships. The communications and media groups have traded under separate stock symbols since November 1995. The regional bell operating company’s phone unit, US West Communications, and its cable unit, US West Media Group, will become US West Inc and MediaOne Group Inc respectively. All the company’s telephone, wireless and directory services will be folded into US West Inc, including its electronic directory business, US West Dex. The MediaOne assets will include US West cable and interactive interests, its international operations, the New Vector wireless group, plus its share of Time Warner Entertainment. Recent developments in technology, markets and regulation will provide strategic competitive opportunities for both businesses that outweigh the benefits of remaining together, said Richard McCormick, chairman and chief executive of US West Inc. The move is seen as continuing its aim to ensure the CATV unit financially supports itself. MediaOne is the current branding for the company’s US cable operations which together form the US’s third-largest broadband telecoms service provider with over five million subscribers in 19 states. MediaOne grew from the merger between US West Media Group and Continental Cablevision in November 1996, broadening US West’s lines of business to include video, telephony and high speed internet access. While under the umbrella of the same company, the cable unit has been prevented from offering services in the 14 states where US West is the dominant local service supplier. According to the company, the split partly reflected this enforced divide as separate companies it says the regulations regarding alliances will be the same as between any two publicly traded companies.

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