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NTL supercharges broadband

1Mb is now entry-level

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The smart choice: opportunity from uncertainty

NTL looks set to take a big lead in the UK's broadband sector by ramping up speeds next year for residential broadband customers while freezing prices. The move will leave a yawning gap between NTL's offering and BT-based ADSL services.

NTL's entry level 300k service will be supercharged to 1Mb while still costing £17.99 a month. Its new 2Mb service will cost £24.99 while 3Mb will cost £37.99.

The speed increases will be rolled out to new customers during the first three months of next year, although existing customers must cough up a £25 "administration fee" to make the switch.

Industry insiders reckon BT will have to follow suit or risk losing out, following this latest shake-up to hit the sector.

Said NTL chief exec Simon Duffy: "To retain our leadership position in broadband, we will be increasing the speeds of our ntl: Home products in Q1 2005 to 1Mb, 2Mb and 3Mb at existing prices. This decision reflects our determination to ensure that we will always have the most competitive range of broadband products in the marketplace."

The announcement accompanies NTL's Q3 results which showed that revenues swelled five per cent to £583m from £555m during the same period last year. Revenues were boosted by an increase in broadband and telephone subscribers, but offset by lower voice revenues in NTL's business division.

Despite this, the cableco scaled down its net loss by 19 per cent to £95.4m from £118.4m in Q3 2003. Part of this is due to NTL paying less interest following its recent refinancing, the company said.

It is also trying to cut costs by reviewing its "disconnection and credit management practices", and is in the process of elbowing 23,800 customers during Q4 who should have been "disconnected previously...due to non-compliance with our policies". It's also reducing the number of days customers get to settle their accounts before it disconnects their services.

Duffy said: "During the third quarter, we remained focused on our four stated objectives and, despite a more intense competitive environment, were successful in increasing market penetration, growing total revenues year over year, expanding underlying margins and enhancing cash flow.

He also added that two call centres had been closed during the last three months. Another six calls centres will close their doors in Q4.

"The call centre consolidation, together with other efficiency initiatives, will reduce overall headcount to around 13,100 by the end of the year, underscoring our continuing efforts to improve margins," he said.

Incidentally, NTL failed to provide any more detail on its decision to pull the plug on its direct telephone service in Ireland last month amid fears that hardware might overheat.

Said NTL: "In October, ntl: Ireland ceased its domestic direct telephone service, which had a customer base of 2,200, after identifying a potential safety risk. This decision did not affect any other service provided by ntl: Ireland." Oh well. ®

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