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By Ben King, 13 May 2002 17:45

NEWS NTL has signed up Freeserve as its first customer for wholesale broadband internet access. The deal will see Freeserve selling a branded broadband service using NTL's cable network. NTL already has wholesale deals for narrowband access with AOL and Virgin.Net, but this is the company's first wholesale broadband deal. The arrangement will be very similar to the one Freeserve and other ISPs use to deliver broadband access to BT subscribers, using a DSL network provided by BT's wholesale division. The news came as NTL announced that its broadband subscriber numbers had reached 200,000. However, NTL is just returning from the brink of financial collapse, with parts of the business filing for Chapter 11 bankruptcy protection. It is unlikely that the new NTL will have access to large sums of cash to invest in marketing its broadband services, which face increasingly stiff competition from BT's DSL services. NTL will be glad to have Freeserve's powerful marketing machine on its side. Freeserve has recently launched a "broadband-in-a-box" campaign, featuring a DSL modem and access subscription in a single package through high street retailers such as Dixons. This is currently only available to customers with a BT telephone line. However, Freeserve will be marketing a similar package for NTL customers, who require a different kind of modem. While Freeserve will naturally be targeting NTL's existing 2.8 million telephone and TV customers, NTL hopes its partner will bring in entirely new customers, without making a dent in NTL's marketing budget. "We hope that Freeserve can sell new customers the whole bundle of NTL services, including TV and telephone, and not just broadband internet," a spokeswoman said. Gartner analyst Susan Richardson said: "NTL's strategy seems to be to concentrate on maximising revenue from existing customers. But this is a way to get more customers without spending a whole lot on revenue." Thus far the two companies have only announced a memorandum of understanding, so the details of price, services, business models and marketing programmes are currently unconfirmed. They are hoping for an autumn launch, an NTL spokeswoman said. She confirmed that the company is in discussions with other ISPs to strike similar deals.