Cable firms steal a march on Murdoch

The cable industry took a huge step towards consolidation yesterday when the three largest operators announced a supplier of set-top boxes for planned digital television services, leapfrogging a similar decision widely expected by satellite rival BSkyB.

The move brings together Telewest Communications, the largest cable company, with Bell Cablemedia and Nynex CableComms in a broad collaboration which will involve combined purchasing and greater co-operation over marketing strategies.

The three partners have chosen General Instrument Corporation, a large US electronics company, to supply the set-top boxes, which enable customers to decode digital TV signals. Telewest said General Instrument planned to supply hundreds of thousands of boxes by the end of 1998.

Further suppliers may be asked to sub-contract manufacturing later, though the announcement is a setback for Pace Micro Technology, the small UK company which had hoped to sell its digital decoder to the cable companies and BSkyB.

Significantly, the three cable operators also pledged to continue the partnership after Bell and Nynex merge with Cable & Wireless's telephone subsidiary Mercury later this year to form a pounds 5bn cable giant, C&W Communications. Other cable companies are also likely to join the alliance over the next few months, including Comcast and General Cable, offering a single digital alternative to BSkyB.

A spokesman for Telewest said: "We are working very closely with the new executive team at C&W Communications. We are now working together on other services, including a joint electronic programme guide which steers customers through the new services on offer."

Telewest said one big advantage of its service was that customers would not have to buy the boxes, instead paying the cost of the equipment as part of a monthly subscription. BSkyB intends to ask customers to pay about pounds 200 for their boxes, a price subsidised to encourage a strong take- up of the service.

When the service begins in October or November, cable customers will be offered many more television channels than the average of 50 on analogue cable TV, along with internet access and video-on-demand. Telewest said it was talking to banks, supermarkets and other retailers about further interactive services to come in 1998.

News of the supply deal came as a surprise to industry experts, who had thought BSkyB would be the first group to announce a firm agreement to supply set-top boxes for its digital satellite service, planned to start towards the end of this year. Rupert Murdoch, head of News Corporation, BSkyB's largest shareholder, is thought to have chaired a board meeting at the group in London last Tuesday to finalise a deal.

Analysts played down the rivalry with BSkyB, arguing that the new digital cable service will follow existing cable policy in offering Sky programming alongside other channels.

Mathew Horsman, media analyst with stockbrokers Henderson Crosthwaite, said: "This is consistent with Sky's view that the company will be the platform for all kinds of delivery systems, including satellite and cable. But this is a great deal for the cable industry and a sign that operators are getting their act together and consolidating."

Start your day with The Independent, sign up for daily news emails
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Evening Administrator

£8 per hour: Recruitment Genius: This Pension Specialist was established early...

Guru Careers: Executive Assistant / PA

£30 - 35k + Bonus & Benefits: Guru Careers: We are seeking an Executive Assist...

Ashdown Group: Graduate Application Support Analyst

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Reach Volunteering: External Finance Trustee Needed!

Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...

Day In a Page

War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable
Living with Alzheimer's: What is it really like to be diagnosed with early-onset dementia?

What is it like to live with Alzheimer's?

Depicting early-onset Alzheimer's, the film 'Still Alice' had a profound effect on Joy Watson, who lives with the illness. She tells Kate Hilpern how she's coped with the diagnosis
The Internet of Things: Meet the British salesman who gave real-world items a virtual life

Setting in motion the Internet of Things

British salesman Kevin Ashton gave real-world items a virtual life
Election 2015: Latest polling reveals Tories and Labour on course to win the same number of seats - with the SNP holding the balance of power

Election 2015: A dead heat between Mr Bean and Dick Dastardly!

Lord Ashcroft reveals latest polling – and which character voters associate with each leader
Audiences queue up for 'true stories told live' as cult competition The Moth goes global

Cult competition The Moth goes global

The non-profit 'slam storytelling' competition was founded in 1997 by the novelist George Dawes Green and has seen Malcolm Gladwell, Salman Rushdie and Molly Ringwald all take their turn at the mic
Pakistani women come out fighting: A hard-hitting play focuses on female Muslim boxers

Pakistani women come out fighting

Hard-hitting new play 'No Guts, No Heart, No Glory' focuses on female Muslim boxers
Leonora Carrington transcended her stolid background to become an avant garde star

Surreal deal: Leonora Carrington

The artist transcended her stolid background to become an avant garde star
LGBT History Month: Pupils discuss topics from Sappho to same-sex marriage

Education: LGBT History Month

Pupils have been discussing topics from Sappho to same-sex marriage
11 best gel eyeliners

Go bold this season: 11 best gel eyeliners

Use an ink pot eyeliner to go bold on the eyes with this season's feline flicked winged liner
Cricket World Cup 2015: Tournament runs riot to make the event more hit than miss...

Cricket World Cup runs riot to make the event more hit than miss...

The tournament has reached its halfway mark and scores of 300 and amazing catches abound. One thing never changes, though – everyone loves beating England
Katarina Johnson-Thompson: Heptathlete ready to jump at first major title

Katarina Johnson-Thompson: Ready to jump at first major title

After her 2014 was ruined by injury, 21-year-old Briton is leading pentathlete going into this week’s European Indoors. Now she intends to turn form into gold
Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot