Dutch Cable Ops Unite on Telephony

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Amsterdam, Netherlands -- Four this country's largest
cable operators have announced that they will upgrade and interconnect their networks to
provide end-users with nationwide telephony service.

Operators Casema N.V (a unit of France Telecom S.A.),
United Pan-Europe Communications N.V., Castel N.V. and Palet Kabelcom B.V. claim to reach
4.3 million households, or 68 percent of the market, with their basic-cable services.
However ,the operators provide telephony only on a small scale, and sometimes on an
experimental basis. To upgrade their networks, the companies will be required to make a
large investment, with some estimates in the $750-to-$1,000-per-home range.

It will also take the partners a few years to develop
services. The announcement is meant to indicate to telecom regulator Onafhankelijke (OPTA)
that competition to KPN Telecom N.V.'s de facto monopoly is underway.

Earlier this year, based on its review of the Dutch
telecommunications market, OPTA ruled that KPN's excess profits should be curtailed.

By announcing their goal, the cable operators hope to
prevent any further forced reductions in local-call rates, as this would hinder them from
building networks suited for telephony services.

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