Pace Micro resumes set-top box deal with NTL

Pace Micro Technology is to resume shipments of set-top boxes to NTL, the crisis-hit cable group, despite still being unable to secure credit insurance on this business.

The company will supply 300,000 boxes to NTL over the 13-month period to May 2003. The new deal follows a public falling out between the two companies, after Pace abruptly halted shipments to NTL, saying that it was unable to obtain insurance cover to supply the debt-ridden cable group on credit.

Andrew Wallace, marketing director at Pace, said that his company had still been unable to insure orders from NTL and he added that Pace was not financing the busin-ess itself.

However, both companies declined to divulge the new terms that have allowed box shipments to resume. Pace is a major supplier to NTL and the breakdown in relations between the companies was a blow to both businesses. The box maker was forced to put out a profit warning in March, partly as a result of the NTL difficulties.

Malcolm Miller, chief executive of Pace, said: "Notwithstanding this agreement, the board continues to acknowledge the difficulties created by the current market conditions and does not anticipate changing its expectations for the 2002/03 financial year."

NTL will use the 300,000 boxes to convert its analogue customers to its digital service, as well as take on some of the one million former subscribers of ITV Digital that have been left stranded after that service went bust.

Separately, Pace said that sales of its new "adaptor" box, a basic model that allows households to receive free-to-air channels, were better than anticipated, despite the consumer confusion following the demise of ITV Digital. Pace has put 55,000 adaptors into the market for April and May.