Cable network operator NTL today announced an agreement with service provider AOL to deliver broadband over NTL's cable infrastructure.

The deal follows a similar announcement back in May with ISP Freeserve which has never come to fruition.

"That was a memorandum of understanding and we are still in discussions with them, however this is a signed contract which will definitely go ahead in the Spring," said a spokeswoman at NTL.

Today's contract is worth a total of £85m over the next four years and will enable AOL to extend it broadband services, launched back in June, to NTL's 7.2 million users.

"This agreement will give AOL the widest coverage of any broadband service provider in the UK and help us build a leadership position in the high-speed market," said Karen Thomson, chief executive at AOL.

But the wholesale deal will be restricted to NTL's 600Kbps (kilobits per second) service — slightly faster than its ADSL equivalent but slower than the top 1Mbps (megabit per second) speed offered through NTL Home.

If AOL really wants mass-market adoption then a future contract with cable provider Telewest, which covers those areas NTL does not reach, must surely be in the pipeline.

"We want to extend our reach where possible, so you can be sure we are in talks with anyone that will allow us to [achieve this]. Where there's the chance of a deal we will consider it," said an AOL spokesman.

Pricing has not yet been set but AOL said it would be "comparable" to other services on the market.

As of this week punters at Carphone Warehouse will find AOL Broadband DIY packs sitting alongside Telewest's similar cable broadband product, Blueyonder. This represents AOL's first foray into retail.