The investment, which is expected to create 200 jobs, includes installation of three more public telephone exchanges, extending the company's ability to offer telephone services in its franchise areas.
Cable television companies are seen increasingly as the main rival to BT in local telephony. However, without their own exchanges, the companies rely on BT or Mercury to switch calls, paying them a large chunk of the revenues. Diamond was among the first of the cable companies to begin putting in exchanges, enabling it to offer free off-peak calls within its own system.
Gary Davis, the managing director, said the company also intended to offer pay-per-view videos and interactive games later this year as well as banking and education packages.
Diamond has seven franchises, operates 10,000 telephone lines and reaches 32,000 homes with cable television. The franchises cover the towns of Grimsby, Grantham, Newark, Melton Mowbray, Mansfield, Lincoln and Nottingham.
The company is raising pounds 50m in debt and between pounds 40m and pounds 50m in equity to help finance the expansion. The balance will be paid from cash generation and by the company's owner, McDonald Management of Birmingham, Alabama.Reuse content