Pan-European cable operator UGC plans to cut 185 jobs at cable operators Chorus and NTL Ireland if their planned merger gets the go-ahead from the Competition Authority and the Minister for Enterprise Trade and Employment.
The company - which bought Chorus last year - intends to close NTL's existing call centre in Waterford and cut jobs across both firms, according to documents seen by The Irish Times.
A post merger business plan prepared by UGC shows it expects to generate cost savings worth €40.4 million in the first three years following a merger of the two cable companies.
It also expects to enjoy a further 22 per cent saving on the economies of scale produced by introducing NTL to UGC's existing set-top box purchasing agreement.
The 185 redundancies would represent almost 20 per cent of the merger workforce at NTL and Chorus, which is understood to be about 950 employees.
However, the document suggests that the 185 redundancies is only the "initial" figure targeted by the firm. There could be more job losses when the merger is completed by UGC, which operates cable television systems in 14 European countries.
The closure of NTL's customer care facility in Waterford, which employs more than 100 people, would be a major blow for the city. UGC plans to integrate NTL's customer support operation in Chorus's Limerick call centre. It remains unclear if staff would be offered relocation to Limerick under the merger plan devised by UGC.
UGC's proposed €325 million acquisition of NTL is currently being considered by the Competition Authority.
If the authority rules that the merger does not reduce competition in the market then the Minister for Enterprise, Micheál Martin, will make the final ruling on the merger.
The threat to jobs could increase the political pressure on Mr Martin, although under the legislation governing media mergers he can only intervene to protect the public interest.
UGC's plan to merge Chorus and NTL also envisages centralising the network planning and upgrade operations for both companies. The two firms are currently investing millions of euro to upgrade their cables to enable them to offer broadband internet and telephone to customers. This strategy would be co-ordinated.
The document also shows that the firm expects to receive regulatory approval for the merger in September 2005. This suggests that UGC believes the deal will go to a second stage review by the Competition Authority.
The new entity would be called UGC Ireland and will focus on rapid migration of customers to digital television. Some NTL content agreements are to be used in the merged entity, however UGC content pricing is already available to NTL, according to the business plan.
The proposed merger of NTL and Chorus would create the biggest provider of pay television services in the State. Both firms combined would have a customer base in excess of 550,000 people, dwarfing the satellite firm BSkyB, which has 355,000 customers for its platform.
UGC said it could not comment on the details of its merger strategy. But it confirmed redundancies would occur.
