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World Markets Analysis

September 26, 2005

By Adrian Baschnonga

From Lexis Nexis

Telewest is starting to upgrade customers in Scotland to a 10-Mbps service, at the same time sizing up technology that would eventually allow it to offer end-users a 100-Mbps service.

Telewest said that its blueyonder "elite" broadband users in Scotland - currently offered services at between 2 Mbps and 4 Mbps - would be upgraded with immediate effect at no extra charge. Meanwhile, some 100,000 users in London, the capital, are in line for an upgrade to the 10-Mbps service later this month. The firm's "elite" broadband users pay $35 per month (US$62.10), down from a previous price of $50.

Significance: Telewest's upgrade announcement shows that the cable player is eager to make some of the running in a U.K. market that is beginning to set the standard for fast broadband services. Both UK Online and Be are planning to roll out 24 Mbps ADSL2+ services later this year in London, against which BT's upcoming 8-Mbps offering pales in comparison. However, Telewest plans to up the ante in the triple-play stakes with its 10-Mbps service by using a different part of its cable network for digital TV and video-on-demand (VOD) services.

A Telewest spokesperson sought to highlight that despite the hype surrounding ADSL2+, much of the bandwidth involved will be taken up by IP TV service provision. On the subject of 100-Mbps broadband speeds, Telewest highlighted the importance of its investment in data over cable service interface specification (DOCSIS). The standard works using hybrid co-axial cable, but Telewest is planning an Ethernet upgrade so as to enable users to dispense with the need for a modem.