The Financial Times is reporting this morning that the boxes being supplied by Pace did not meet BT’s requirements.
BT’s decision will be a fresh blow for Pace, which became the world’s biggest maker by volume of set-top boxes in 2010. In March 2011 it had a disastrous results period when it emerged a key US order had been deferred.
Pace shares have gained 75 per cent in value over the past year, partly on the back of rumours about a potential bid from a private equity buyer.
TalkTalk, a rival telecoms group, has already begun a limited roll-out of its boxes made by Huawei, while the Humax boxes are available in shops. BT’s decision to roll out the service on Humax boxes is not expected to delay the YouView launch, which has already slipped from an original date in 2010.
FT reports sources as saying the Pace box equipped with faster chips is just not ready in time. BT says it will end up using Pace as well as Humax. Pace declined to comment on the issue, but said BT was a highly valued customer.
Seven partners in hardware-making for set-top boxes were first signed up to the project but most others, such as Cisco and Technicolor, dropped out leaving Humax, Huawei and Pace.