THE telecoms company Cable & Wireless is poised to win the contract to supply a broadband service for Virgin Media to sell to millions of customers beyond the reach of its cable network.

A formal announcement may not be made until next month, but Virgin Media is no longer negotiating with other suppliers. Tiscali said last week that it has no interest in the contract — contrary to recent comments by Steve Burch, Virgin Media’s chief executive.

A deal with C&W will allow Virgin Media to offer a broadband, phone and basic television service to parts of the country not served by its cable. The cable industry has always been frustrated by a lack of national reach, a consequence of restricted geographical franchises.

This made it more difficult and costly for cable television to compete with BSkyB, the satellite broadcaster that is 39% owned by News Corporation, ultimate owner of The Sunday Times.

C&W will deliver the service to Virgin’s customers through its wholesale broadband arm, formerly known as Bulldog Communications. The bandwidth limitations of ADSL broadband technology — which relies on BT’s copper wires — means that Virgin will be unable to offer its full package of high-speed internet access and video-on-demand.

Burch said this was still a big step forward because “there are 12m homes out there that we’ve never sold anything to”.

Virgin Media is this weekend considering legal action against Sky over access to Sky One and Sky News. Virgin dropped them after refusing the pay Sky’s “unfair” price. Sky suggested new negotiations but will not reopen discussions about how much it pays for Virgin channels.

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