Brit Telecom to host video on demand
ADSL upgrade helping Video Networks launch service
The service will be offered by Video Networks Ltd., a private company that is aiming for a stock market flotation next year.
The move has been made possible by BT's decision, announced Thursday, to upgrade its entire network for high-speed digital services, including Internet access and video-on-demand.
BT will start introducing asymmetric digital subscriber lines (ADSL) technology in London this fall, rolling the service out to 6 million homes in eight major cities by March.
Video Networks, headed by chief exec Simon Hochhauser, has been running trials for the past three years.
The company plans to roll out a full commercial service offering 5,000 movies and 400 musicvideos over the phone line, accessed via a decoder that the company will rent to subscribers for around £15.50 ($25) a month. Individual movies will cost between $3.20 to $5.60, equivalent to a video rental.
The company, with the help of N.M. Rothschild, is in the midst of raising $64 million from private investors as a prelude to an IPO early next year.
ADSL effectively delivers broadband capacity over conventional copper phone wire. Backers said it will transform the BT network into one of the world's most advanced telecom systems, a potential competitor for the U.K.'s cable operators, not to mention the video rental business.
BT itself sees ADSL primarily as a way of dramatically speeding up online access and has no plans to offer its own video-on-demand service. But under law, the telco must make its network available to any outside company -- such as Video Networks -- that wants to offer a service.
