NTL may lose its cable licence following its decision to delay the introduction of digital television services in the State.

The telecoms regulator, Ms Etain Doyle, has the right to revoke the licence if its conditions, which include the introduction of service within a certain timeframe, are not met.

NTL holds the exclusive rights to provide digital television over cable platforms in Dublin, Galway and Waterford but confirmed yesterday it had put on hold its plans to provide a digital service. Mr Ian Jeffers, managing director of NTL Ireland, said the firm was conducting a business review which would delay the roll-out of new services. He would not rule out job cuts as a result of the review.

He denied reports NTL had abandoned its plans to provide a service but would not give a timeframe for the introduction of a digital television service.

It is understood Ms Doyle will meet NTL executives later today to discuss the firm's announcement. She is expected to highlight strict roll-out requirements contained within the company's cable licence.

These specify that the company must upgrade its network to be able to provide digital services to more than 100,000 homes within its franchise area by March 31st, 2001. Under legislation provided for in the Wireless Telegraphy Act, the regulator may revoke a cable company's licence if it informs the regulator that "he or she does not intend to comply with the digital roll-out plan".

The regulator could instead remove the exclusivity clause contained within NTL's licence. This would remove one of the major regulatory hurdles preventing Eircom from offering digital television service via digital subscriber line technology.

Mr Jeffers confirmed yesterday NTL had only managed to upgrade areas covering 36,000 homes for digital services. This is well below the limit set by the terms of its licence.

Some 3,000 households in Tallaght, Coolock and Clondalkin, which have subscribed to NTL's bundle of digital services, will continue to receive telephony services. However, NTL's existing analogue television services will not now be upgraded to digital, according to Mr Jeffers.

A Dublin telecoms analyst, who did not want to be named, said last night that NTL's decision highlighted the dramatic turnaround in capital markets and growing scepticism with new technologies.

"There was great excitement about these services nine or 10 months ago but now companies are having to take a long hard look at the business case and the ability to make profits," said the analyst. Analysts and telecoms experts agreed the delay in NTL's digital introduction would remove some competitive pressure from Eircom in the telephony and Internet markets. Without an upgraded digital network, NTL's telephony service will be less attractive as it will have to piggyback on Eircom's local network. This will force customers to use carrier pre-select technology which means they will pay call charges to NTL but will still have to pay Eircom line rental.

Mr Jeffers said the delay in deploying digital services and the continuing business review would enable the firm to bring efficiencies to its operation.

He denied NTL had cash-flow difficulties and said NTL Ireland had to barter with other regional groups for capital.

"It [Dublin] is a costly place to do construction projects right now and the lack of standardisation in rules by local authorities has been one of our biggest challenges," he said.

Mr Willie Fagan, regulatory affairs manager at Chorus, said last night that its digital television service was on track. "We have already 2,000 digital television subscribers on our network and have more demand than we can fulfil," he said.