Unusually, the Westminster cable television franchise is held by BT, and the area has therefore had no cable operator to compete with BT's telephone services.
Videotron's new telecommunications licence, granted by the Department of Trade and Industry, also gives it the right to provide telephone and similar services in the City of London.
In both areas, Videotron plans to provide video and other information or entertainment services over the telephone wires. It cannot broadcast television to homes in these areas, however, because to do so would compete with BT.
Richard Woollam, director general of the Cable Television Association, said it was the first time a cable company had applied exclusively for a telecommunications licence.
In its Hampshire and London franchise areas, which include Kensington, Chelsea, Brent, Lambeth, Wandsworth and Southwark, Videotron provides free off-peak local calls as long as these are made entirely within its network.
Cable companies in general undercut BT telephone charges by between 10 per cent and 15 per cent.
As well as standard cable television, Videotron, which has already built a digital fibre-optic network in its franchises, offers interactive television and telephony. BT has only recently declared its intention to invest in video-on-demand and 'information superhighways'.