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 wasthat the assembled suppliers served the broadband industry, and not just cable TV.

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

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

Illsley said he believed Telewest's somewhat notoriouschurn rate would decline rapidly as the MSO continues to address customer service whilerolling out digital.

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

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

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

Including ONdigital's nearly 500,000 subscribers, theUnited Kingdom now boasts about 2.3 million subscribers, or around 10 percent of all TVhomes.

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

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

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

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