Cable providers NTL and Telewest are close to reaching a merger agreement, according to reports in the Sunday Times and the BBC.
The proposed £5.5bn merger would create a real rival to satellite provider BSkyB, as NTL has about 3.1 million subscribers in the UK while Telewest has 1.8 million.
Reports say combining the two would generate vast operational savings, with implications for jobs at both companies.
Both Telewest and NTL declined to comment.