Telewest turns aggressive against BT
Tuesday 11 June 1996
The company, which covers 3.7 million homes in its regional franchises, is expected to guarantee that it will undercut BT on every telephone call, and to offer up to six phone-and-TV options.
The news emerged as BT said yesterday it would spend pounds 200m with partner MCI to expand its Internet network, adding up to a third to the overall "world-wide web" capacity through their Concert joint venture. The service will provide eight "hubs" world-wide, allowing customers, including multinational businesses, fast and easy access to the Internet.
Both BT and its cable competitors have been aggressively pitching for new telephony business in the UK. Telewest's marketing move comes in direct response to BT's new pricing regime, announced earlier this month.
Telewest customers will be offered a "mini-basic" package to cost as little as pounds 15 a month for 10 cable TV channels and a telephone subscription. Other packages, some of which have already been trialled in the Midlands and the North-west, will range in price from about pounds 20 to pounds 35 a month.
Telewest operates under different names in its main franchise areas, which include zones in Scotland, the North-east, the North-west, Avon, South London and the Midlands. Starting this week, it intends to market all its fully owned franchises under the name Telewest Communications.
"We looked carefully at the way our customers reacted to us across the country," Alan Michels, the company's chief executive, said yesterday. "We discovered that 60 per cent of those in our franchise areas had no spontaneous recall of the names of their operators."
The cable industry has only recently returned to favour among investors, following several months of negative publicity about its poor marketing prowess and low take-up rates. Telewest, by far the largest operator, recently announced it would complete 65 per cent of its planned network by the end of the year, and would now concentrate on marketing its services.
"Cable operators need to think nationally and act locally," Mr Michels said. "What we're trying to do is to be a broadband connection company so that a customer can hook up to the system for whatever reason - for his PC, cable TV, phone."
BT, like other traditional phone companies, has been slow to respond to the growth of the Internet globally, which has about 60 million users world-wide, even though mainstream telephone systems are used by most customers to access the network.
BT and MCI estimate that the pool of Internet users could grow to 500 million by the end of the decade.
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