LONDON: Friends Provident and Resolution, two British insurers with a combined market value of about 8.3 billion, are in merger talks that are scheduled to be announced on Monday, people with direct knowledge of the talks said over the weekend.

Discussions for such a combination, which would value the two companies together at about $16 billion, are at an early stage and no transaction is guaranteed, said the people, who declined to be identified because the talks are confidential.

“I would back Resolution to do this deal and execute it successfully,” said Ed Collins, a fund manager in London with New Star Asset Management.

Friends Provident has expertise in marketing new life insurance policies, while Resolution is good at managing them, Collins said.

After months of speculation on possible consolidation in Britains life insurance sector, confirmation of talks between its two smallest blue chip players could flush out other deals, as well as other potential bidders, particularly for Friends.

Friends Provident has frequently been named as a takeover target; AXA, the French insurer, and private equity bidders have in the past been named as potential interested parties.

The people with knowledge of the talks said this weekend that the aim was for a “merger of equals” - given the roughly equal size of Resolution and Friends and their complementary businesses - with top management roles split between them.

Shares of insurers have been among the worst performers in the FTSE this year, with the life insurance group ranking 36 out of 39 in the FTSE All-Share Index. Friends Provident, the worst-performing insurance stock this year in Britain, said in April that it could struggle to meet a target for new business.

Friends Provident rose 4.3 percent in London on Friday, the biggest one-day jump since May, on speculation that it was a takeover target.

More than 61 million shares changed hands, three times the daily average over the last 12 months. The stock has declined 14 percent this year, valuing the company at 4 billion.

Resolution rose 0.2 percent Friday, reducing this years decline to 1.9 percent and giving the company a market value of 4.3 billion. The combined companies would rank fifth in the British insurance industry by market value.

The merger talks were first reported by The Financial Times and The Times of London on Saturday.

The talks have been going on “for several months,” The Times reported, without saying where it had obtained the information.

Resolution typically competes with companies like Swiss Reinsurance to buy funds that no longer accept new customers, trimming expenses and collecting premiums until policies expire.

Resolution, whose chairman is Clive Cowdery, also manages funds for new clients and bought the life insurance unit of Abbey National for 3.6 billion in 2006.

Friends Provident, which appointed Philip Moore as chief executive officer in January, had forecast 200 million in profit from new business in Britain by 2008.

Investors have also speculated that J.C. Flowers, a private equity firm in the United States, Standard Life and AXA may make a combined bid for Friends Provident, The Times said. Friends Provident initially resisted merger talks with Resolution, The Financial Times reported without citing the source of the information. Friends Provident is now “more amenable” because of “strains on its cash flow and capital,” the report added.

Any doubt about whether the iPhone holds appeal for consumers has been put to rest by images of folks lining up for days outside Apple stores and by opinion polls reflecting high interest in the multimedia calling device.

But whether the iPhone can satisfy the needs and cravings of businesspeople hinges on how capably the device can interact with corporate networks and handle applications such as e-mail. It’s an important question for Apple («www.businessweek.com»), which in recent years has moved beyond computer-making competitors like Dell («www.businessweek.com») and Hewlett-Packard («www.businessweek.com») to tussle with makers of digital music players such as Sony («www.businessweek.com»), Creative Technology («www.businessweek.com»), and SanDisk («www.businessweek.com»). As a newcomer to cell phones, Apple is already girding for battle with manufacturers of wireless handsets such as Nokia («www.businessweek.com»), «investing.businessweek.com», and Motorola («www.businessweek.com»). And if the iPhone takes off in the business arena, Apple will find itself grappling with the likes of smartphone makers Research In Motion («www.businessweek.com») and Palm («www.businessweek.com»). BlackBerry Remains the Gold Standard

So will BlackBerry addicts soon be switching their allegiance to the iPhone? Not likely, says Gartner («www.businessweek.com») analyst Ken Dulaney. Gartner is advising clients—mostly big corporations—not to support the iPhone for now. “It’s just not ready for prime time as a corporate e-mail device,” Dulaney says. “The resistance by the IT departments of large companies to supporting the iPhone is going to be fairly widespread.”

That’s certainly the case at Bank of America («www.businessweek.com»). “BlackBerry is our current standard and we have no plans to change that,” says Bank of America spokeswoman Shirley Norton. “We look at new technology all the time and BlackBerry is all we have right now.” In the area of e-mail, the iPhone has some key disadvantages. While it will connect to the kinds of accounts consumers are likely to have from providers such as Yahoo! («www.businessweek.com»), Google («www.businessweek.com»), and EarthLink («www.businessweek.com»), it will connect less easily with corporate e-mail accounts, especially those running on Microsoft’s («www.businessweek.com») Exchange, the dominant messaging platform in large corporations.

The iPhone is designed to work with Exchange in cases where a system supports a message-retrieval method known as IMAP. The trouble is, most Exchange installations don’t. “Only a fortunate few will find they will be able to use their iPhones for corporate e-mail as a BlackBerry replacement,” says Forrester Research («www.businessweek.com») analyst Charles Golvin. Security Risks Inhibit Corporate Adoption

A tech-savvy user can probably figure out a way to forward corporate e-mail to a Yahoo, Gmail, or EarthLink account to which the iPhone is more easily linked, but they could run afoul of corporate IT policies designed to keep e-mail confidential. “That becomes a problem,” says Gartner’s Dulaney, “because corporate IT hasn’t secured those external accounts.”

A big concern for many IT managers is ensuring that any new wireless communication devices are secure. “It is imperative for Apple to continue to analyze the inherent security risks with the iPhone architecture,” say Jan Volzke, global marketing manager for mobile security at McAfee («www.businessweek.com»). “As it grows in popularity, the iPhone will surely become an attractive target for hackers.”

ROME: In a country where almost everything is fiercely divided along political lines, it came as a surprise to many when lawmakers on opposing ends of the political spectrum joined forces last week in support of a singular cause: to halt the rumored cancellation of “Incantesimo,” or “Enchantment,” one of the most popular soap operas in Italy.

“If Incantesimo were to be canceled, Italian fiction risks losing one of its most long-running and successful products,” Francesco Giro, a member of Parliament for the conservative Forza Italia party, told the ANSA news agency. He said he could not understand why Radiotelevisione Italiana, or RAI, the state broadcaster, “would want to eliminate an entirely Italian product.”

Members of Forza Italia in Romes city hall said they would begin a protest Monday in front of the main offices of RAI.

“The cancellation would have serious repercussions in terms of employment,” fretted Enrico Gasbarra, the centrist governor of the province of Rome, to reporters. The audiovisual sector is an “important resource for our area, and it must be protected.”

The long-running saga set in Rome about the convoluted lives and loves of doctors at the “Life Clinic” - an ex-beauty center turned state-of-the-art private hospital - is in its ninth season. When it aired in prime time, “Incantesimo” was one of RAIs most popular series, distributed in 25 countries.

But success may have sealed its fate. In January, “Incantesimo” changed formats, going from a prime-time weekly movie to a half-hour weekday show. At the time, the switch was strategic as RAI grappled for daytime ratings with its main competitor, Mediaset, which is owned by the family of former Prime Minister Silvio Berlusconi. “Incantesimo” managed to grab a 16 percent share compared with 20 percent for Mediasets “Vivere,” or “Living.”

Under pressure to cut costs and investments, RAI accountants turned their shears to daytime programming. And that is when rumors began to circulate that RAI would not renew “Incantesimo” for a 10th season. The show had been scheduled to begin shooting in September at a cost of \100,000, or $138,200, an episode.

On Thursday, Claudio Petruccioli, the RAI president, said no decision had been made on the future of the show, except to finish production of the current season.

Agostino Sacca, head of RAI Fiction, the production and distribution arm of RAI, defended the show and said that RAIs cost-cutting measures would “not be resolved cutting products, especially successful ones that reached their strategic objectives,” ANSA reported.

Meanwhile, jobs and national pride are at stake. Antonio Alessi of the Deangelis Group, producer of “Incantesimo,” said, “We need answers because television production is an industrial process and needs continuity.” The show directly employs about 250 people, and more than twice that including jobs like caterers.

“In the end, its a question of bureaucracy,” Alessi said. “Italians just dont understand how the television business works.”

But politicians certainly know how voters think, and local lawmakers immediately protested loss of employment, not to mention a made-in-Italy product.

“Incantesimo” is one of just two Italian soaps produced by RAI: the other is a nightly program called “Un Posto al Sole, ” or “A Place in the Sun,” which is set in Naples.

“Incantesimo” is also “an Italian format, so there has been more satisfaction that it went well for years,” said Luca Milano, the head of marketing at RAI Fiction.

The problem is “not about the product in itself,” Milano said. “Its about afternoon programming.”

But some commentators think RAI is right to be looking at the bottom line.

In Thursday editions of Corriere della Sera, the columnist Aldo Grasso called “Incantesimo” a product of “mediocre artistic value” and chided politicians for wanting to protect workers in a sector that by its very nature provided no job security. “We want a restless soul and a fixed income,” Grasso wrote.