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One question that this NTL development leads to is “Why not VDSL?”

VDSL can deliver even more bandwidth over shorter distances. We think that VDSL and VDSL2 could both be used over the distances that NTL is connecting, but it is less clear when a VDSL2 standard will be ready and whether or not the standard will get installed in very many places. It is volume production that drives the cost of the chipsets down and given that all DSLAMs that have been put on for the past year or so have been using ADSL2+ compatible chips, it is these that are likely to yield lower prices in the Customer Premises Equipment, only $10 higher than existing ADSL modems.

In January this year NTL and Telewest set up a Video on Demand service offering a 24-hour viewing window, mimicking most of the US cable operated VoD services.

Seachange International got the server contract by dint of the fact that it has invested in a joint venture company that provides the VoD content. This company is going to market as FilmFlex but is none other than the renamed Sony and Disney owned company that received European Commission approval in the UK. The two studio giants were given leave to start their own film services due to the fact that BSkyB holds too great a grip on UK film channels.

This is an effective beachhead for Sony and Disney and we expect it to emerge elsewhere in Europe, as other cable companies take it on board. The service includes content from the BBC, Nickelodeon, Jetix, Warner Music, Entertainment Rights, VPL, Hollywood Pictures, Touchstone Pictures, Miramax Film Corporation, Pathé, Icon Films and Playboy TV, now with more to come.

NTL announced revenues of £2,073.6m for its full year this week ($3.97bn) and losses of £495.4m ($949m), but this included amortization of £709.9m ($1,359m),which means that with low capex, it had free cash flow of £61m ($117m).

NTL reduced headcount by 1,200 during 2004, had a churn of 1.5 per cent per month and added 34,200 net new customers.

Copyright © 2004, Faultline

Faultline is published by Rethink Research, a London-based publishing and consulting firm. This weekly newsletter is an assessment of the impact of the week's events in the world of digital media. Faultline is where media meets technology. Subscription details here.

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Broadband boost helps NTL trim losses
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