UK cable modem debut

TELEWEST Communications, the cable company that agreed to buy General Cable, has said it will start selling an internet service later this year offering dial-up speeds up to 20 times faster than those now available.

The company says it expects to be the first to introduce high-speed cable modems to the UK, making it possible to download video, music, graphics or any files that need a lot of network capacity, within seconds rather than hours. It says it might co-ordinate a joint launch with Cable & Wireless Communications, Britain's biggest cable company.

Cable modems could give Telewest and other cable companies a competitive advantage over British Telecom, BSkyB, AOL and others in targeting the booming market for internet services. The modems allow users to download information at up to 30 megabits a second. For example, a 3in by 5in colour photograph could be downloaded on to a personal computer in just four seconds.

"We have over 1.5 million dial-up internet customers today, all candidates for high-speed services," said Charles Burdick, finance director of Telewest. "The question is which will be the most popular medium for broadband internet: the TV or the computer? For me it's the computer."

Telewest says it is already experiencing rapid growth in internet connections. A total of 17,059 customers have signed up for internet access via Telewest in the three months to the end of March. That is an increase of 248.5 per cent on the 4,895 customers it added in the same period a year ago.

BT has said that within five years internet traffic alone would be as extensive as ordinary voice phone call traffic, which now makes up about 90 per cent of the company's revenues. Mr Burdick said Telewest was in talks with a number of companies who package content for high- speed services, including video games and financial data retrieval. He said the company also planned to route voice calls - more cheaply - over the internet.

Telewest has been testing cable modems made by Motorola and the California- based Bay Network, in trials in South-east England and Scotland. CWC has also been testing the Motorola product. About 200,000 cable modems have already been deployed in the US.

BT is also testing alternative high-speed internet technologies, including Microsoft's WebTV product, which allows customers to surf the internet from television sets.

In addition, it is running trials of Digital Subscriber Line technology in London, which allows voice, data and video signals to be compressed and carried over ordinary copper telephone lines.

"Telephone companies are going the DSL route," said Gavin Parnaby, an analyst at Datamonitor Europe, an information technology consultancy. "Cable modems are going to come out first, which will push the phone companies to bring out DSL."

Cable franchises owned by Telewest, whose founders and biggest shareholders are US West Media Group and Tele-Communications International, both of Englewood, Colorado, reach 4.3 million UK homes.

That compares with about 29 million homes which buy telephone services from BT, which controls close to 70 per cent of the UK telecommunications market.

Telewest will reach 6.1 million UK homes if plans to buy General Cable for pounds 915m in stock, cash and assumed debt proceed as planned next month.