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Video Networks is to unbundle hundreds more exchanges as it makes its broadband TV service available to some ten million viewers in the UK.

The national expansion of its local loop unbundling (LLU) network is to be funded by Video Networks' existing shareholders and by a new round of fund-raising led by investment bank CSFB.

Video Networks delivers video on-demand, digital TV, broadband and voice services. At the moment, Video Network's Homechoice service is available to around 2.4m homes in London, but from next year it intends to begin a national roll-out of its service making its footprint roughly on par with that of soon-to-merge cablecos NTL and Telewest.

Except while the cablecos have an established business with millions of punters, so far Video Networks has only managed to sign up 34,000 customers. Still, the company is optimistic and has high hopes that its broadband / TV / telephony service will prove popular with viewers.

"We are growing our customer base rapidly and we are growing the proportion of our customers who buy all three services from us," said Roger Lynch, chairman and CEO of Video Networks.

"This gives us great confidence in our decision to launch our national roll-out and bring the attractions of Homechoice to a much wider UK audience," he said.

Separately, the company described as "rumour and speculation" reports that Homechoice could be a take-over target for satellite group Sky, which is already buying LLU operator Easynet for £211m to enter the UK's broadband market. ®

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