NTL has started trialling technology that lets businesses connect their networks to the Internet at high speed over their existing phone lines.
Starting in Guildford and Woking, NTL will use asynchronous digital subscriber line (ADSL) technology to connect businesses to its £3 billion national fibre optic backbone at speeds between 2Mbps and 6Mbps.
ADSL runs over a twisted copper wire pair. NTL's cables, through which it also broadcasts cable TV, contain both a twisted copper pair and a coaxial cable.
Targeted at medium sized businesses, the service is aimed at damaging BT's presence in the leased line market and defending NTL from the flood of broadband services expected next spring when BT equips several major cities with ADSL.
NTL gave no details of pricing for its ADSL service, but said it is "watching others very closely."
In April, NTL started deploying cable modems, also in Surrey, giving residential customers Internet access at up to 0.5Mbps. NTL envisages home workers using cable modems to connect to their corporate networks, which are in turn connected to the backbone using ADSL.
"Our focus has been on a range of technologies," said Stephen Rowles, group managing director of business services at NTL.
"We must not lose sight of the fact that customers want fast file transfer and as far as most are concerned, they don't care whether it is ADSL, cable modem or broadband wireless. But they are very bothered about increasing the speed that they can access the Internet."
But cable modems have limitations - the amount of available bandwidth depends on the number of simultaneous users in a street. "It's a shared medium, so the bandwidth level is unpredictable," said James Eibisch, analyst at IDC.
Peter Black, NTL's group managing director of network services, said ADSL is "faster and more stabilised" than cable modems, and in some cases home workers could use ADSL to connect to their office network.
However, NTL has no immediate plans to offer ADSL to consumers. "We envisage that we will launch a consumer ADSL product, but that's not in the initial rollout," said Black.
NTL also hopes to offer ADSL services outside its franchise areas, using BT's local networks when they are opened up to competitors in 2001.
ADSL is expected to rapidly displace cable modems in the European business market, according to research group Datamonitor. By 2004 as many as 21 per cent of European businesses will use ADSL, while a third of that number will use cable modems and other broadband technologies.
"This seems to make sense because they're getting both ends of the market," said IDC's Eibisch.
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