NTL, Telewest scrap ADSL plans

Telewest and NTL have scrapped plans to use BT's lines to offer residential high-speed internet services.

The cable operators said they will instead concentrate on pushing cable modem services using their own fibre networks.

BT will be forced to allow competitors to share its local lines from next year, enabling companies such as NTL and Telewest to offer high-speed digital subscriber line (DSL) services. However, BT has been accused of dragging its feet over unbundling and the rollout of DSL.

Telewest said in a statement: "We share the view that we would be better advised to spend our money and concentrate our fire power in rolling out aggressively in areas we have already got."

A Telewest spokeswoman added: "Our network has state-of-the-art fibre, with superior and far more bandwidth than DSL. We have 1.6 million existing customers and pass through 4.6 million homes. We will concentrate on focusing on pushing Blueyonder, our high-speed internet service."

Rival operator NTL said that while it considered DSL for consumers, it "stepped back from the process about a month and a half ago".

An NTL spokeswoman said: "It is our intention to roll out our cable network, and technically we believe that is the right way of going forward. The US has suffered problems with ADSL [asymmetric DSL], and our own fibre optic network is more robust and widely trialed."

NTL could not confirm whether the decision to steer away from DSL in the consumer market will affect the operator's plans to roll out ADSL to small businesses.

The operator said in October it would offer ADSL for small and medium-sized businesses in February.

Tim Johnson, an analyst at researcher Ovum, said: "It is a bit surprising that they [NTL] have chosen not to offer DSL services as it means that they can't offer services except in areas where they operate. But perhaps they feel they wouldn't be able to make a profit offering services via unbundling."

"The industry seems to be drawing in its horns and there is an atmosphere against investment by telcos. Offering services via unbundling is distinctively tough to make money from and perhaps Telewest and NTL are focusing on what cable can do," Johnson added.

Both operators refused to comment on industry concerns that BT's sluggish approach to opening up its local exchanges played a part in their decision to focus on using their own networks.

BT has been accused of dragging its feet over allowing other operators to offer high-speed internet services over its network.

The NTL spokeswoman said: "We couldn't comment on BT. We have invested £4.5bn over the past five years in our network and it makes sense for us to make use of our broadband via cable modem services."

Last week telcos Energis and Thus were assured by UK telecoms regulator Oftel that BT will be forced to negotiate better terms for wholesale DSL network access. The two companies have argued that BT's current wholesale DSL offering limits the way rival operators can use their own networks to run DSL services.