From 1 July it will be competing with BSkyB and ONdigital to sign up households who want multi-channel digital television services.

ONdigital is set to face new competition

The cable company's package costs from £9.98 a month and includes a range of television channels and telephone line rental.

It says its price compares with its rivals' basic monthly price of £15.90, although they include Sky One and Discovery channels free.

Interactive services

CWC has a lot of ground to make up on satellite broadcaster BSkyB and terrestrial broadcaster ONdigital who have already signed up hundreds of thousands of subscribers to their digital services.

In all there will be 130 digital channels available. From October e-mail and interactive services such as home shopping will be available.

Industry watchers believe that cable's large data carrying capacity may prove to be the best means of delivering digital services, including Internet services through television sets.

Microsoft has been building up a series of stakes in cable companies in the UK, Europe and the US as it seeks to ensure its operating systems are used in what Bill Gates calls the emerging "web lifestyle".

CWC is launching its services in the North West of England, before rolling it out in London from October and across the rest of the UK from the beginning of next year.

BSkyB has more than 500,000 digital customers

A spokesman for BSkyB said the CWC comparisons did not fully factor in the savings which could be made on all phone calls with Sky.

"Sky's offer of a free box, 40% off all standard BT calls and free access to the Internet remains the best digital deal around.

"Any comparisons which ignore the costs of phone calls are meaningless.

"Once Sky's 40% discount off every call is included in the comparison it is clear that consumers will benefit from choosing Sky Digital."

Cable & Wireless shares closed up 11p at 796p on Friday.