I am a trader as well as an investor and hopefully this thread will reflect both aspects ....

We should start by saying this is a highly speculative share and the market takes no prisoners.

Over the last 18 months I made lots twice in the early days - then lost it back - bought a million at 2.6p average - founded the TAG - bought another half a million or so at sub 1p - sold most at average 4.25 - bought back at 2.2p and less - sold most at 3.5p and now buying back - overall a good net profit at this time.

I think the d4e will happen (say 90% chance) and the 3% currently talked about will give or should give a price equating to say 3/5p. Longer term on succcess of d4e and progress in the sales market the shares should move to around 10p - assumming markets are not in freefall.

I am looking to buy at any time and hoping for a war generated dip - when I do I will let you know.

The TAG site is a great place for catching up on the TWT news and I will post here as well.

Currently trading on TWT is light (1.7 million traded) and the price is down a littlw with a wide spread (2.01/2.35p). This is a sets share and you must expect a crtain amount of manipulation in these troubled times - FTSE down over 4% intraday

I have a core holding of at least half a million shares and intend to be a long term investor at this time.


ainsoph


http://www.investoraction.co.uk - currently we have 804 registered members holding around 100 million shares in total

no real change in the trading range - volumes are high @ 11.5 million


Telewest inches closer to debt agreement

Chris Tryhorn Guardian
Thursday March 27, 2003

Telewest managing director Charles Burdick today said the cable company was making "slow, steady progress" in its efforts to resolve its debt restructuring.

Mr Burdick said negotiations with John Malone's Liberty Media and Deutsche Telekom - both of which hold 10% of Telewest's bonds - and the bondholders' committee are getting closer to completing what he called an "intensive paper process of agreements".

Telewest, Britain's second largest cable company, owes 3.5bn to the bondholders, and agreed last year to exchange the debts for 97% of the group's shares.

Reports have suggested the refinancing will be completed by the end of May, but Mr Burdick today refused to give a precise indication.

He also implied that a merger with NTL, which has just emerged from Chapter 11 bankruptcy with a new team of executives, was inevitable.

"We have gone from 26 cable companies [in 1990] to two, and some day that will be one," he said. "That will be market permitting and shareholder permitting."

Telewest revealed today its losses had increased in 2002 to 2.2bn from 1.9bn. This made allowance for a write-off of 1.6bn of goodwill.

The company said it was changing its focus from subscriber acquisition to "churn reduction" and focusing on customer service as well as cost control.

"We are very focused on churn reduction and tightening up our sales process," Mr Burdick said.

It is facing a battle from BSkyB's satellite service for TV business and from BT for the provision of broadband internet services. Telewest claims it has 297,000 broadband customers.

Mr Burdick said he was keen to further the identification of the Telewest name with its content arm Flextech and its channels including Trouble, Bravo and FTN, by stamping programmes with the Telewest logo and introducing other cross-promotional measures.

He is still looking for a replacement for the former managing editor of Flextech, Jane Lighting, who has moved to being chief executive of Channel Five.

In its drive to cut costs, Telewest trimmed its workforce last year by 1,450 to just over 9,000, and Mr Burdick said "several hundred" jobs would go in 2003 as a result of "attrition", departing workers who will not be replaced.

Mr Burdick said the company was well placed for growth after restructuring.

"We will be well positioned to realise our ambition of being the leading broadband communications company in the UK," he said.

The Scotsman

Telewest takes control as profits rise by 19%

BY GARETH MACKIE BUSINESS EDITOR


TELEWEST Communications, the UKs second-largest cable group, today reported 19 per cent growth in core profits, but has taken a 1.64 billion writedown in the value of its assets.

Earnings before interest, tax, depreciation and amortisation came to 379 million last year, the troubled firm said, compared with 319m in 2001 and in line with analysts expectations.

Total turnover in the year to the end of December rose two per cent to 1.35bn, but the writedown pushed Telewest to a net loss, after exceptional items, of 2.2bn, and the company said talks on restructuring 3.5bn of its massive debt pile were continuing.

Managing director Charles Burdick said: "We continue our focused strategy designed to accelerate cash generation, future profitability and provide a platform for growth. These results demonstrate the progress we have made."

He said costs before redundancy payments and capital expenditure were down "significantly".

Last May, Telewest announced 1500 job losses, or 15 per cent of the total workforce, while cutting annual capital expenditure from 600m to 450m. Staff at its operation at Edinburgh Park are being affected by those cuts, but the company has not confirmed how many posts are being lost in the Capital.

Mr Burdick said: "Our efforts are now focused on sustaining our leadership in broadband, building a profitable customer base, great customer service and controlling costs.

"We are building on our strengths in local access to the residential and business customer, the power of bundling multiple services, and our unique position in content through our ownership of Flextech."

Last month it was revealed that Walt Disney Television International, the distribution arm of Disney, had investigated the possibility of buying Flextech, Telewests TV production and distribution division. No formal bid was made and the two companies are not believed to have started even informal talks.

Ex-Flextech chief executive Jane Lighting has been installed as the new head of Channel 5, and the unit is being run in the short term by Mark Luiz, Telewests finance director.

Telewest has focused on selling high-speed internet access to the 4.7 million homes available to its network. It added 46,046 broadband subscribers in the fourth quarter, and as of today has a total of 297,000 broadband customers.

But as it competes with satellite television company BSkyB and former telephone monopoly BT, the cable company lost 866 telephony subscribers and 11,024 cable subscribers in the fourth quarter.

Telewests average monthly revenue per user rose to 41.80 from 41.59 in the third quarter and just over 40 a year ago.

Mr Burdick said negotiations with creditors over a plan to swap 3.5bn of its 5.2bn debt for equity were continuing.

The company has already agreed in principle to hand over 97 per cent of its equity to bondholders to wipe out 3.5bn in bond debt. That means Telewest shareholders will be left owning only about three per cent of the company.

Telewest, like rival NTL, ran up massive debts by spending billions of pounds on a rapid expansion drive.

Highest volume for 7 weeks already and that's before US open - price has edged down a tad but stil within recent trading range


ains



Telewest reports £2.2bn losses channel 5

Cable operator Telewest has reported a £2.2 billion loss for last year after it took a £1.6 billion write-down on the value of its assets.

The company, which provides cable television and internet services, announced the figures as it continued efforts to complete a financial restructuring.

The UK's second biggest cable operator has been working for the last year to overhaul a £3.5 billion debt mountain but has offered no firm guidance on when the talks with bondholders, senior lenders and stakeholders would be finished.

However, the Woking, Surrey-based group said it was confident of a successful conclusion to the process.

Telewest, like rival NTL, ran up massive debts after spending billions on a rapid expansion drive with its network now covering nearly 5 million homes.

In a statement, Telewest said it now had 80 per cent of market share in its cabled areas and had taken its number of broadband customers to 297,000 - 183,000 of those subscribing to Internet, telephone and television.

As part of a cost-cutting exercise the company has delivered 1,450 job cuts of the 1,500 it promised in the summer and has slashed capital expenditure by 27 per cent to £477 million during the past year.

Telewest made a loss before the write downs of £506 million in the year to December 31, an improvement on the £801 million loss the previous year. But that rose to an overall loss of £2.2 billion after the write downs.

In January, Telewest overcame a major hurdle when it secured a new £2.2 billion bank loan, allowing it to stay in business while it thrashed out a debt-for-equity swap.

Analysts in the City have predicted Telewest could merge with rival NTL when both have stabilised their financial position.

In the fourth quarter, Telewest sold for cash its shareholding in SMG for £45 million and Maidstone Studios for £4 million in further moves designed to pay off debts.

Revenues from the consumer division rose 6 per cent to £910 million, mainly from the growth of broadband products, with average revenue per user growing by 4 per cent to £41.80 for the year.

Internet and other revenues rose by 98 per cent to £79 million in 2002 while revenue from the business division increased by 5 per cent to £224 million.



--

2 million buy just gone through @ the touch ......

If what I've stated is nonsense, please tell me where it specifically states existing shareholders are guaranteed 3% of post restructure equity.
The only news I can see is:- Telewest Communications PLC, the heavily-indebted cable company, said it was confident of securing a deal with lenders that would allow it to stay in business.
They have only a non-binding preliminary agreement to restructure. Although 3% may well happen, bondholders could still do what they did to both Energis & NTL.
Since TWT are effectively in administration, in all but name, shareholders can have no say in any restructure. Given the asset/equity value of the company, the bondholders could go to the courts, state they are willing to accept equity for debt & get the lot.
I suggest you study Company Law in this respect & in particular how easily the two companies mentioned were handed over to creditors.

I have copies of all the relevant paperwork from TWT - articles of association and memorandum ..... of course I don't profess to be a lawyer but have spoken with their directors + their chairman + their lawyers. Also have correspondance with them, the DTI and FSA chair peeps.

This situation is different to the ones you mention and whilst their are no guarantees - the company will not be going into administration - shareholders will be voting on the proposals and it's probable existing shareholders will get 3%.

By all means short them if you think differently - I am looking to add a few and will apppreciate any help I can get. My money is on the long side and will stay there for the end game.

Suggest you reread some of the above posts thast have originated from twt


ains

Whilst not speaking directly to Telewest Officers, I have been in communication with them. On the rest I can only say me too ainsoph.
I am not a shorter, holding 40k+ of TWT & like you holding out 'til the end: however it pans out.
Given past performances from the Board of Telewest, I now have little faith in any of their actions: in relation to shareholder security.
Their obligations are first to the company, then creditors & at the bottom of the pile is the shareholder.

I accept they will look after their own jobs first and also the general concept that although we feed them - the shareholders are last in the queue. There is little doubt the previous CEO led us astray but we cannot do much about the past. I am reasonably assured from my discussions that TWT will not be able to do a Marconi. It is in no ones interests for the company to go into administration and therefore the bondholders will have to negotiate on a reasonable basis - accepting the fact that Liberty have a blocking vote and also control a substantial number of bonds.

I am reasonably confident but now talking from the strength of having traded myself into net profit. I still go along with the idea we will see a successful D4E and the minimum value of current shares will be 3p with a high probability of 5p in the very short term.


ains




Telewest announces massive losses after a major impairment of its assets as the restructuring of its balance sheet grinds slowly on.


Chief executive Charles Burdick preferred to focus on the operational successes of selling broadband Internet access, but with equity that is about to disappear to the bondholders and losses of 2.2 billion after these write-offs, the cable television operator holds little allure.

Telewest (TWT) has taken a massive 1.6 billion asset impairment to better reflect current valuations of such assets. Although this is a non-cash item, it leaves a particularly nasty pre-tax loss.

Turnover for the year to December rose 3% to 1.35 billion and earnings before amortisation and the exceptional write-offs rose 19% to 379 million.

The company has slashed some 400 million a year off costs through a 40% reduction in staff as well as a 27% cut in capital expenditure, which is expected to continue next year also. Capital expenditure should run at around 'the mid-three hundreds [million]' next year.

Burdick said the balance sheet restructuring, which involves a debt for equity swap that will leave equity holders with just 3% of the company, is a 'slow process' which is still grinding on but is 'getting closer.'

The company is still in talks with banks and bondholders, significantly Deutsche Bank and Liberty Media.

Burdick reckons today's results are 'solid' and particularly show success in broadband sales as well as a 'relentless' focus on cutting costs.

He said the company had reviewed its strategy, and has shifted its focus to leadership in Broadband Internet, which has the highest margins, and is most likely to prompt users to take Telewest's 'triple play,' of telephony, TV and Internet.

The company's business division grew by 5% by focusing on upselling to existing corporate customers, although services to other carriers were down to 43 million from 61 million.

The content business, Flextech, grew advertising revenues 'ahead of the market.'

Burdick's target for the company is for it to be cashflow positive by the fourth quarter of this year.

Shares are down 0.2p to 2.4p, valuing the one-time giant at just 68.9 million.

Citywire Verdict:

Telewest talks of broadband leadership, but it has stiff competition in BT. It continues to lose plenty of customers from churning, the business division still has enormous challenges in the wholesale sector due to other carriers' problems, and if Telewest is lucky and finalises the debt restructuring, there will be just a tiny amount left for equity holders. All in all, one to pull the plug on.

2003 Citywire

Telewest claims 300,000 broadband punters...
By Tim Richardson
Posted: 27/03/2003 at 15:13 GMT


Telewest has almost 300,000 broadband customers, it boasted today.

Publishing its full year results, the cableco said that it had 297,000 broadband users, with 31,000 of those signed up to its 1Mbps service.

No doubt Telewest is keen to plug this good news story and the fact that it is to begin trials of a new 2Mbps broadband service.

Predictably, though, many of today's headlines have focused on the cableco's announcement that it made a loss of 2.2 billion for the year, which included and "exceptional non-cash charge" of 1.64 billion for the devaluation of some of its assets.

Turnover for the year was up a smidgen at 1.3 billion.

Zeroing-in on its Internet operation, Telewest reported that revenues from this had increased by 98 per cent to 79 million in 2002, due mainly to the growth in broadband subscribers. Of which it now has nearly 300,000.

The company also claims that its broadband product is helping to attract new customers for other services, including digital TV and telecoms.

News, Liberty strike share deal
By Geoff Hiscock, CNN Asia Business Editor
Friday, March 28, 2003 Posted: 0404 GMT (12:04 PM HKT)



Rupert Murdoch and son Lachlan see DirecTV as a good fit for News Corp.



SYDNEY, Australia (CNN) -- Global media group News Corp has struck a deal with a major shareholder, John Malone's Liberty Media Corp, for Liberty to buy up to $500 million in News shares over the next six months.

Liberty already owns about 18 percent of News, which is controlled by executive chairman Rupert Murdoch and his family.

The deal gives impetus to the long-running bid by Murdoch for U.S. satellite broadcaster DirecTV, which is owned by Hughes Electronics, a unit of General Motors.

News is expected to make a bid for GM's 30 percent economic stake in Hughes, rather than seeking full ownership.

Under the deal announced Friday, Liberty would buy preferred limited voting ordinary shares in News at $21.50 per American Depositary Receipt (ADR).

The joint announcement, released to the Australian Stock Exchange just before midday Friday, immediately sent News shares higher.

They are trading up 3.17 percent at A$11.10 in early afternoon, on a day when the broader market is flat.

News said that if Liberty does not exercise its right within six months, News can require Liberty to buy the stock at the same price of $21.50 per ADR if News acquires a stake in Hughes Electronics within two years.

The $500 million share deal indicates that Malone is prepared to back a Murdoch bid for DirecTV.

Murdoch has wanted for years to buy DirecTV to give him access to the large U.S. satellite television market and add its assets to a global broadcasting empire that includes BSkyB in the U.K. and Star TV in Asia.

With 10 million subscribers, DirecTV is the largest U.S. satellite broadcaster.

An earlier bid by Murdoch was thwarted in October 2001 when GM opted to sell Hughes Electronics to the No.2 U.S. satellite broadcaster EchoStar for about $26 billion. EchoStar, controlled by Charlie Ergen, has 6.7 million subscribers

That sale was subsequently vetoed by regulators in late 2002, allowing Murdoch to revive his ambitions.

GM owns 100 percent of the assets of Hughes and 30 percent of the tracking stock. Along with News, other potential bidders for DirecTV are SBC Communications and New York-based Cablevision Systems Corp.

Murdoch's son Lachlan, deputy chief operating officer of News, said recently that either DirecTV or EchoStar would be a "great fit" for the company's business.

News Corp's media assets include newspapers in Australia, the UK and the U.S., satellite broadcasters in Europe, Asia and Latin America, the Fox Broadcasting Network and the Hollywood studio Twentieth Century Fox.

Liberty Media operates in video programming, broadband distribution, interactive technology and communications.

coming within range maybe ..... 215 230

Liberty helps rival bid for Hughes

David Teather in New York
Saturday March 29, 2003
The Guardian

Liberty Media has backed away from challenging Rupert Murdoch's News Corporation in a bid for Hughes Corporation, the parent company of DirecTV, the biggest
satellite television network in the US.
John Malone, the prolific media investor who runs Liberty, has instead decided to back Mr Murdoch's bid, and increase his own stake in News Corp from 17.5% to 19%.

Liberty is already the largest outside shareholder in News Corp, whose assets include the Times and the Sun newspapers, the Fox TV network and a controlling stake in BSkyB.

Liberty will pay $500m (318m) for the additional shares, which will help fund the Hughes bid.

News Corp last week issued a $1.35bn convertible bond against shares in BSkyB, of which roughly half will be added to its war chest. The company has one of the strongest balance sheets in the debt-ridden media sector and has around $3.1bn in cash.

Liberty and News Corp had been planning a joint bid for Hughes but the plans fell apart and both were considering individual offers.

Mr Malone has been shifting the strategy of Liberty and is moving more toward owning and operating businesses instead of being a passive investor.

The company might have considered DirecTV a more logical fit with News Corp, which owns cable channels in the US as well as satellite net works around the world, including Star TV in Asia.

The decision to work with Mr Murdoch also quashes speculation of a rift between the two media moguls who have worked in tandem on many deals.

Liberty's decision to back away significantly improves the chances that News Corp will win Hughes, fulfilling Mr Murdoch's long-held ambition to own a US distribution network.

In the first auction for Hughes, more than a year ago, Mr Murdoch lost to DirecTV's rival EchoStar. But regulators balked at the merger of the top two satellite providers in the US and blocked the deal.

News Corp could face opposition from SBC Communications, but it remains unclear how serious the local telephone provider is about making an offer.

Liberty is understood to have held discussions with EchoStar about a possible bid. Like News Corp, Liberty owns content including the Discovery Channel, Starz and QVC and is eager to combine its programming with a distribution network. Washington might take a dim view on a deal, given Liberty's investment in News Corp.

Mr Murdoch has appeared to be interested only in acquiring the 20% of Hughes that General Motors is making available for sale. How much control that would give Mr Murdoch or Mr Malone, who may have negotiated some kind of board representation, is debatable.

Chris Tryhorn
Monday March 31, 2003


Jean-Marie Messier: accused of 'fraud, misrepresentation and concealment'

John Malone's Liberty Media has filed a lawsuit against Vivendi Universal, claiming it was deceived about the scale of the French group's financial problems during a transaction in December 2001.

The deal involved Liberty swapping some of its stake in USA Networks for a 3.5% share of Vivendi worth 1.1bn, an investment that has lost more than 70% of its value since May 2002, when the deal was closed.

Liberty said Vivendi's chief executive at the time, Jean-Marie Messier, and his chief financial officer, Guillaume Hannezo, obscured the true picture of Vivendi's finances with "outright fraud, misrepresentation and concealment".

The deal was part of the complex negotiations to form Vivendi Universal Entertainment, which was created out of Barry Diller's USA Networks.

Vivendi described Liberty's suit, which was filed in New York, as "without merit".

The two firms have recently been in talks on future tie-ups and Liberty has registered an interest in buying the troubled group's US entertainment assets,

which include Universal Studios and USA Networks.

Vivendi - which posted the biggest loss in French corporate history earlier this month - has been trying to reduce its debt mountain of about 11bn over the past nine months since Mr Messier was ousted.

Last week it raised 2.4bn by issuing high-yield bonds and signing a new loan facility but its long-term prospects may depend on selling its assets.

It has already disposed of publisher Houghton Mifflin, Italian pay-TV broadcaster Telepiu and satellite broadcaster Canal Plus Technologies.

The Vivendi chairman, Jean-RenFourtou, has said his target for 2003 is to dispose of assets worth 4.8bn and reduce debt to 7.6bn.

Liberty is known to be interested in making acquisitions, having boosted its war chest to about 2.5bn in recent weeks.

Vivendi's assets are one potential target and it may buy the rest of shopping channel QVC, which it co-owns with Comcast.

Mr Malone seems to have stepped aside from bidding for US satellite broadcaster DirecTV, putting his weight instead behind Rupert Murdoch's likely bid after upping his stake in the tycoon's News Corporation last week.

MediaGuardian.co.uk special report

ainsoph, do you reckon we'll now be stuck with the 3% or could TWT follow the pattern of other recent D4Es by including warrants? I got the impression in the TAG days that you felt not or not able to say - any different views now - perhaps even on the 3%. Taking a long time too isn't it. If it was as simple as 3% we'd surely be there by now. Any insight?

Andyble

I have talked at some length with the directors and others at TWT on the question of the 3% and very specifically on the idea of including warrants. At the time it was made clear they thought the idea of warrants was a non-starter (too messy) and the 3% was 6 times better than moni and a good deal ..... good for both sides. It seemed very unlikely when it was first mooted they (Company or bondholders) would change their view or stance.

As time went bye Liberty and others took various positions and my inclination was to think the % would be higher - it never crossed my mind it would be lower. liberty are still keen to keep control but guess they don't have sufficient paper and the other bondholders clearly want to go their own way. My guess ids still a 3% minimum and the delays are about control rather than the ordinary others shareholders %

Missed the action yesterday but will be looking to add


ains

ainsoph, thanks.

Together NTL and Telewest are ahead of BT in the broadband stakes, and could sign up more than one million customers by the end of April
The UK's two major cable companies are close to reaching a total of one million broadband customers, and look set to beat BT to this landmark by at least a couple of months, according to figures released by NTL on Monday.

In its financial results, NTL stated that on 21 March it had 650,000 broadband cable modem customers. Around 133,000 of these users have signed up since the start of 2003, giving NTL a current take-up rate of around 12,000 new broadband customers per week.



With fellow cable operator Telewest having around 300,000 broadband customers, the two companies can boast a total of some 950,000 high-speed Internet users.

Reaching a combined total of million broadband users would give both firms a fillip, especially given their recent financial turmoil, and would emphasise their key role in the creation of Broadband Britain.

At current sign-up rates -- Telewest is connecting "about a thousand new broadband customers each working day", according to a company spokesman -- this milestone should be shattered before the end of April.

Whither BT?
BT chief executive Ben Verwaayen vowed last year that the telco would reach one million ADSL customers by the summer of 2003, and five million by 2006. Given the patchy state of Broadband Britain at the time, this was an ambitious target, but the telco seems to be on track.

It announced last week that it had a total of 750,000 ADSL customers -- shared between all the ISPs that resell its wholesale broadband products. Take-up rate is understood to be between 20,000 and 25,000 per week, which if maintained would certainly lift Verwaayen's firm over the finishing line with ease.

Some ISPs are speculating privately, though, that BT could soon be hit by a minor slump in orders as people begin to favour outdoor activities and decide to hold back from splashing out on broadband until after their summer holidays. The ending of its half-price activation fee offer might also lead to a decline in take-up.

BT insisted, though, that it is still "absolutely" on track for one million users by this summer. And, having not set a specific date such as 30 June, it has some leeway if the one million target isn't hit until July.

Must admit I chopped my TWT lines a month or so ago .....


BT 'second best', says Telewest
By Tim Richardson
Posted: 02/04/2003 at 14:19 GMT


Telewest claims BT is still "second best" despite today's announcement that the UK's dominant telco is to cut the cost of some of its phone calls.

In what could prove to be the beginning of a war of words following BT's "radical" pricing announcement this morning, David Hobday, deputy MD of Telewest Broadband, said: "This is yet another example of BT waking from its cosy slumber, attempting to follow our lead and getting it all wrong.

"Their own research demonstrates consumers' desire for lower, less complicated call charges, and that's exactly what we've been offering for over a year now.

"Our Talk Unlimited, Talk Evenings & Weekends and Talk International packages, which BT conveniently seems to ignore in its comparisons, still make BT second best."

Casting doubt over BT's latest assertions, one insider told us: "Our Telewest Talk Unlimited service is 26 per month with no strings attached, yet their BT Anytime plan is 28.50 with call charges after an hour... go figure it out for yourself."

Almost added a few today but couldnt get the price I wanted - 13m sell after close



ains

Battle of the band

Speculation is rife about a merger between NTL and Telewest. But if it goes ahead, can the new cable giant challenge BT for the leadership of Broadband Britain? By Richard Wray

Monday April 7, 2003
The Guardian

Ten years ago there were more than two dozen cable companies operating in the UK. Today there are just two, NTL and Telewest. To get here both companies spent billions of pounds and in the process pushed themselves to the edge of the financial abyss. They are now trying to stage a recovery and speculation is rife that if a merger can be agreed a single cable company would be a powerful competitive force.

But forget Sky, the enemy here is BT, and the prize is leadership in Broadband Britain.

With all the noise made by BT over the past few months about its broadband offerings it is often forgotten that more UK households actually use cable for fast internet access. Later this month cable will announce that it has amassed one million broadband users, a target that BT will not pass until the summer.

Some in the cable industry believe that one of the key drivers behind BT's acceptance of the importance of broadband last year was its need to see off the competitive threat posed by cable.

After months and months of wrangling about gaining access to BT's local exchanges to use its lines - a process known as local loop unbundling - BT introduced a wholesale product which allows any internet access provider (ISP) to make use of its lines at an affordable price. This digital subscriber line (DSL) technology suddenly opened up BT's lines to other ISPs.

Last week BT announced it has connected 800,000 lines using a particular version of this new technology - known as ADSL. It also cut its price, having halved it last year, in order to ensure it hits its target of one million broadband customers using its network by the summer.

Bill Goodland, internet product director at NTL, believes cable rather than the government and the regulator Oftel should be thanked for BT's largesse. "The improvements that we have seen at a retail and wholesale level are directly linked to what the cable companies are doing - it is competitive, not regulatory pressure that is improving life for your average DSL customer."

The question is whether the cable companies can continue to outpace BT now that the weight of the communications group is so firmly behind broadband. What will hamper the cable industry is exactly what led them into last year's financial mire - having to pay to dig up the roads.

The cable industry is some way away from being a truly national competitor to BT. BT last week announced that 90% of the UK's population is now within reach of a local telephone exchange that can provide broadband - if enough people in the area want it. That compares with the cable networks of NTL and Telewest, which pass just over half of the UK's 25m households.

In addition the cable network is far from being fully integrated. It is more like a patchwork quilt, a consequence of the different acquisitions which formed Telewest and NTL in the 90s.

Telewest reckons that about 95% of its network, which passes 4.9m homes, is broadband-enabled while NTL is lagging the field, with just 79% of the 8.4m homes it passes able to receive fast, always-on internet access through a cable modem.

"The limiting factor is that their networks pass much fewer households than BT," according to Jonathan Tee, analyst at industry research house Analysis. "So there is inevitably going to come a point when BT does overtake both the cable companies, regardless of whether or not they are one company."

To create a national network the cable companies would need cash. While NTL has dragged itself most of the way back to some semblance of financial health, having just emerged from bankruptcy protection, Telewest is still trying to bash heads together among its creditors in order to get a new financial package passed. That is unlikely to happen until the autumn.

In the meantime both companies are very wary of scaring the financial markets by mentioning any expansion. At the time of NTL's results last month its chief executive Barclay Knapp made it clear that the company's first priority is to make use of equipment that has already been installed, connecting people who have moved into homes where the previous occupant was a customer. Then NTL will move to connecting customers that are passed on the street. NTL is unlikely to increase its geographic footprint any time soon.

Announcing results a few days later, Telewest's chief executive, Charles Burdick, said: "The focus for the team is on driving the operations and moving out of the restructuring."

So would a merger of the two companies help? It would have no overall effect on customers, as the two networks do not compete in any of the same areas. But the chances of the financial community suddenly feeling more confident about the economics of cable are slim in the current climate.

Anthony Walker, head of the Broadband Stakeholder Group, set up two years ago to advise the government on the new technology, believes that cable is likely to remain a smaller player than BT for some considerable time. "BT is always going to have more coverage, the big question is at what point can the cable industry start expanding its coverage - it is going to be a while before that happens."

But he believes the cable companies will continue to play a crucial role in the development of broadband. "The cable companies have been a really important competitors to BT and I think in many ways that competition has continued to drive development and innovation in the market".

The main area of innovation for the cable companies has been the introduction of broadband services which work at different speeds. While BT's ADSL-based service operates at ten times the speed of the typical household modem, Telewest recently introduced a service that operates at twice the speed of BT. It has already signed up 30,000 customers and forced BT to start developing a similar service. In response Telewest is running a trial of a service that works twice as fast again.

The company's head of internet services Chad Raube believes the ability of cable modems to operate at much faster speeds than connections into BT's network will become increasingly important as more and more households become "wired homes".

"We will always have the capability to go faster than ADSL and do that more cost effectively and to more customers. As broadband becomes more of a connection to the home, a utility as common as water, speed will become more and more important and we will be able to leverage that advantage to win the market share battle in our areas," he says.

In the home of the future, he reckons, people will connect more than just their PC to the internet, so will need more capacity from their broadband provider. Cable will play a crucial role: "BT need a lot more than rhetoric and fancy announcements to really catch up with that."