European cable TV operators were scrutinised by bond and equity investors today after an industry executive said there could be delays in the launch of key Internet telephony services.
"We received several calls from worried investors who have factored in 20 euros (per customer) per month of telephony revenues, and now ask whether it can be realised," said one sell-side fixed income analyst in London.
Shares in cable companies committed to Internet telephony services, such as UPC, fell by as much as 4.9 percent.
"Europe's second largest cable operator Callahan Associates is still testing the Internet telephony service it plans to sell to its cable subscribers," said Dick Callahan, chairman and chief executive of the Denver-based company.
They're just completing the test whether they're rolling out IP (Internet Protocol) or not, in Germany at the labs of Nortel. Certainly by end of July or August we'll know exactly what the time frame is."
Unlike traditional, circuit-switched telephone systems, used by incumbent carriers as well as British cable companies NTL and Telewest, the new European cable players such as Callahan, UPC and Liberty Media want to use the Internet Protocol to transport calls.
IP is more cost-effective than installing separate telephony infrastructure because it uses the Internet systems that cable companies are installing anyway for their high-speed Web access offerings.