NTL Telewest will offer free digital television and video-on-demand with its home telephone service in the UK. The initiative is evidence of an increasingly competitive communications market.

The offer is available to new and existing customers that take their telephone service from the cable company, starting at £11 per month, including line rental and unlimited local and national weekend calls. There is also a £25 one-off installation charge for new customers.

The free package includes 36 television channels, including Sky One which is normally only available through subscription services. Customers can upgrade to other pay-television packages or a personal video recorder and high-definition. The latter are only available in former Telewest areas but will be offered to NTL customers by the end of the year.

“This is a great deal for consumers who can now sit back and enjoy digital TV and on demand services without worrying about expensive upfront or monthly costs,” said Neil Berkett, chief operating officer at NTL Telewest. Ironically he added: “This deal will make people question the value they are getting from their existing phone or TV supplier.”

The initiative comes in response to the dramatic growth of Freeview, which offers a wide range of free digital television channels over the air for the cost of an inexpensive set-top box. A number of channels are also available on satellite television without subscription. Later in the year, telephone company BT will launch BT Vision that combines broadcast and broadband video services, also without an ongoing subscription.

It brings into doubt once again the value proposition of the so-called ‘triple-play’ offer of video, voice and data services on a single subscriber bill. In an increasingly competitive market, operators are becoming obliged to offer one or more of their core services effectively for free as part of a bundle in order to gain or retain market share. It increases the value to customers, but not to operators, who must rely on upselling additional services.

Cable services have significant technical benefits in theory, but in the UK they have been slow to innovate and have developed a poor record for customer service. They are now consolidated in a single company which is keen to restore its reputation.

NTL Telewest, which was created by the merger of the two cable television companies in the UK, recently completed its acquisition of Virgin Mobile and plans to launch a combined communications package under the Virgin brand.

The company is about to launch a mobile television service, broadcast over DAB, in conjunction with BT Movio.