Mass trial planned for multimedia: Cable companies to spend millions on testing in 4,000 homes - Betting and shopping among services

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The Independent Online
THE CABLE television industry is planning a multimillion pound trial of services ranging from interactive home shopping and education to betting on horses. The trial, which is likely to involve up to 4,000 homes in the North-west of England, will help to assess what people really want to do with new communications technology, and what they are prepared to pay.

Nynex, one of the largest cable television companies in the UK, is expected to host the trial. The company has already announced plans to invest pounds 1.1bn in the North- west to develop an information 'superhighway' linking its TV franchises in and around greater Manchester.

Andersen Consulting is arranging the consortium to conduct the trial. It is likely to include retail groups, betting chains, financial services firms and software companies. The project has been kept under wraps but preliminary discussions are thought to have taken place with companies including Great Universal Stores.

One industry source envisaged a service allowing would-be punters to call up the runners in a race and ask to see videos of past performances before placing bets. Other possibilities include allowing viewers to watch sporting and other events from the camera angle they prefer. Users may also get access to video databases, for example viewing holiday destinations and activities before making a booking.

The communication and computer industries argue that the range of services available in the home in future is limited only by the imaginations of service providers. Cable television companies, however, are keen to find out exactly what the consumer wants so that investment can be channelled in the right direction.

The project being planned is expected to go far beyond BT's experiment with the delivery of video and other services over the telephone wires. BT is conducting technical trials among about 70 of its staff living in the Ipswich area and hopes to extend that to cover 2,500 households, in an area yet to be announced, later this year.

The cable television industry is widely regarded as one of the main threats to BT. Cable companies, largely foreign-owned, are expected to invest up to pounds 10bn by the end of the decade in establishing a broadband network for most of the population. The companies will offer both television and telephone services, but there could be an explosion in revenues if other multimedia services took off.

The Cable Television Association is concerned, however, that the investment might be killed off if the Government lifts a ban that prevents BT delivering entertainment services over the telephone network. BT has argued that it cannot justify investing billions of pounds on installing a broadband network throughout Britain without being able to raise revenues from a range of entertainment and television services.

The House of Commons Trade and Industry Select Committee is also taking a keen interest in multimedia. The committee is conducting an inquiry into the fibre-optic cabling of Britain - including the effect of the ban on BT - and is expected to report within the next few months.

Evidence from the Department of Trade and Industry and the regulator, Oftel, suggests that there will be no lifting of the ban on BT until 2001.

The CTA fears, however, that uncertainty over the issue will cloud forthcoming flotations and fund-raising exercises.

Among these is the planned flotation of Telewest, the largest UK cable company, which is expected to value Telewest at up to pounds 1.85bn. Telewest plans to raise about pounds 350m by listing 25 per cent of its shares, which will also be quoted in New York.

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