Digital, Broadband All the Rage in Britain

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London -- Amid the bigger-than-ever stands from vendors,
the overwhelming message from last week's European Cable Communications show here was
that the assembled suppliers served the broadband industry, and not just cable TV.

Digital and interactivity were the key words and
fundamental components of the merchandise on display.

NTL Inc. chief operating officer Leigh Wood said the MSO
was putting the final touches on its digital-cable rollout. At the same time, Telewest
Communications plc CEO Tony Illsley was even more specific, promising a 150-channel
digital debut, starting Nov. 1 on one system.

Illsley said he believed Telewest's somewhat notorious
churn rate would decline rapidly as the MSO continues to address customer service while
rolling out digital.

"In digital, when you look at that offering, at our
launch and what it will be over the coming months, you would have to believe you could
build much higher levels of customer and brand loyalty," he said. "We can
deliver all of these in a way our competitors never could. Once you start to offer these
multiple services, you have a much greater degree of customer loyalty."

By any measure, cable has some catching up to do. It's
been one year since direct-to-home platform British Sky Broadcasting Group plc debuted its
own digital-DTH service, which has since garnered about 1.8 million subscribers, well
ahead of market forecasts of between 1.5 million and 1.6 million.

"On the basis of Sky's booming success, the
public has little confusion as to what it wants," one analyst said. BSkyB's
digital uptake is outpacing that of digital-terrestrial platform ONdigital by a rate of
almost five-to-one. News Corp. owns 40 percent of BSkyB.

Including ONdigital's nearly 500,000 subscribers, the
United Kingdom now boasts about 2.3 million subscribers, or around 10 percent of all TV
homes.

BSkyB's strong digital performance has very much put
it on the radar of Vivendi S.A., the largest shareholder in both the U.K. platform and its
French peer, Canal Plus S.A.

Vivendi chairman Jean-Marie Messier exercised his right to
appoint a member to BSkyB's board. He has also made no secret of his wish to see his
current 24.5 percent stake in BSkyB result in some sort of merger with Canal Plus.

News Corp. chairman Rupert Murdoch made vague promises to
examine "what [Canal Plus and BSkyB] can do together to improve their
prosperity" in a speech at BSkyB's annual meeting. Murdoch added that he will
meet with Messier before Christmas.

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