Leader: Quad-play quandaries

Last week all eyes were on the to-ing and fro-ing of ITV, NTL and BSkyB as NTL and Sky wrestled for control of the beleaguered broadcaster. The wrangling eventually ended on Friday with Sky taking over a chunk of ITV and effectively prohibiting what could have been NTL's attempt to shore up its pay-TV strategy.

Whether the NTL-ITV union would have worked is a moot point - the more interesting element here is that a cableco fancies itself as a broadcaster. NTL, if you will, is reshaping itself as the new Sky. Sky, meanwhile, has equally been reshaping itself as NTL, buying ISP Easynet and then offering free broadband.

Consolidation is no new trend in telecoms - hardly a week goes by without an acquisition - but the fact that NTL and Sky are now duking it out over ITV shows just what a degree of change has been wrought in telecoms.

NTL is currently the UK's only quad-play (that's mobile, fixed line, broadband access and pay TV) provider but it certainly won't be the last if all the takeovers in telecoms are indicators. Mobile companies are buying DSL outfits - and that path will naturally lead to IPTV. Even straight mobile outfits are fancying themselves as broadband and TV players - see 3's latest moves for one indication.

Quad-play is doubtless a move prompted by a desire to show willingness to shareholders and one that may appeal to customers' apathy by potentially cutting down the number of suppliers an individual has to deal with from four to one.

While NTL may have first-mover advantage in quad-play, once the likes of BT, O2 and Orange get their act together, the new world of telecoms will start to take shape - and consumers' reactions will become clearer.

While the upper tier of companies will be able to afford their own infrastructure, the less well-off will have to settle for reselling others' services under their own brand. And there's not a whole lot of scope for differentiation there.

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So how will telecoms companies attract customers once they're all quad-players? Price. If companies find themselves unable to compete on new services, they can at least sell them cheaper.

It's a move that has happened in the standalone broadband market, after all - Carphone Warehouse and Sky entered the market, for good or ill, by selling themselves as the cheapest providers around.

It's unlikely customers will ever wake-up and think 'I must sign up for quad-play services' but if they think there's a bargain to be had, they'll get interested very quickly.