LIBERTY GLOBAL PLC (NASDAQ:LBTYA), an international cable and media company controlled by billionaire John Malone, is negotiating with Intel Corporation (NASDAQ:INTC) regarding its intention to acquire the online pay-TV service being developed by the chip maker, according to Bloomberg based on information obtained from people familiar with the situation.

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Liberty Global plans to use Intel’s online pay-TV service

The sources, who requested anonymity due to the private nature of the discussions between the two companies, said LIBERTY GLOBAL PLC (NASDAQ:LBTYA) plans to use Intel Corporation (NASDAQ:INTC)’s online pay-TV service in other countries. They opined that the negotiation is early and there is a possibility that it would fall apart.

LIBERTY GLOBAL PLC (NASDAQ:LBTYA) owns Virgin Media Inc. (NASDAQ:VMED), provider of cable, broadband, TV, phone, and mobile services in the United Kingdom, Belgium, Germany, and in other countries.

Intel Corporation (NASDAQ:INTC) had been developing its advanced set-top box since last year, and it is aiming to offer the system this year. Last month, it was reported that Verizon Communications Inc. (NYSE:VZ) discussed its interest to acquire the project with the chipmaker. Malone’s company will compete with Verizon and other parties as Intel began its effort in looking for partners in the project.

Originally, Intel Corporation (NASDAQ:INTC) aimed to launch its service by the end of 2012, but it was delayed because the company faced several challenges such as limited bandwidth and high-cost of TV programming. The chipmaker wants to create a virtual cable operator wherein all TV channels in the United States will be available online and it would offer a subscription similar to the one sold by cable and satellite TV providers.

Eric Huggers, vice president of corporate media at Intel Corporation (NASDAQ:INTC) previously stated that the company’s online pay-TV service is called “OnCue,” which will be offered this year. Consumers will be able to access content across TV sets, smartphones, and other mobile devices through OnCue.

Intel is looking for partners

Last month, Intel’s chief financial officer, Stacey Smith said, “[The] key for us is going to be to have the content lined up so that it’s a great experience, and then to have the right partners in place so we can scale it fast. At the end of the day it’s all going to be about getting those subscribers and those viewers.” Intel Corporation (NASDAQ:INTC) is looking for partners with a subscription base and rights to films and TV programs.

In Europe, BT Group plc (NYSE:BT) (LON:BT.A) and other pay-TV service companies are already offering online features that are faster than the ones available in the United States. In September, Virgin Media Inc. (NASDAQ:VMED) announced that it will offer the online video streaming service of Netflix, Inc. (NASDAQ:NFLX) in its cable-TV package.