Broadband or death for cable firms

Despite crippling debts and tougher competition, UK cable operators are pushing ahead with the rollout of broadband.

Telewest is to launch a 1Mb system to provide a super-fast internet service towards the end of the year. The operator, which is about £5bn in debt, said that it could launch the service without any substantial new investment.

NTL, the UK's biggest cable company, which is in the red to the tune of £12bn, is expected to follow suit in a couple of weeks.

Telewest chief executive Adam Singer is on record as saying that "anything less than 512Kb is the digital equivalent of a Zimmer frame".

Broadband cable users currently pay £25 a month if they take the internet service bundled with other telephony and pay television products.

The cost is much cheaper than BT-based ADSL, which is typically £40 to £50 a month, and the companies argue that they have a long-term technological advantage over the incumbent.

But wholesale price cuts unveiled by BT earlier this week mean that ADSL end user prices are set to fall to under £30 from 1 April, meaning that the cable companies will have to offer a faster service to maintain an advantage.