[UK] BT to slash LLU costs

Moriarty

I've been a tad busy recently, so this is a smidgen out of date. But never mind

BT to slash LLU costs
By Tim Richardson
Published Thursday 13th May 2004 10:04 GMT

BT is to cut the cost of local loop unbundling (LLU) in the UK in a move it claims will increase infrastructure competition.

The UK's dominant fixed line telco is to slash the cost of some products by up to 70 per cent as part of a phased series of cuts, the company anounced today.

Prices are to fall by around 35 per cent from June 1, and a further 25 per cent come September. Prices could fall a further 10 per cent depending on the volume of lines that are unbundled.

A spokeswoman for BT was unable to say exactly at what level prices are likely to be set. However, she did say that by the end of the year the UK should be within the "top five" European countries for competitive LLU pricing.

As part of the cost cutting BT is also to re-design and simplify its current LLU product more in line with those on offer in Europe.

BT says the new offering will "benefit those companies who are willing to invest and innovate" and should reduce the need for future regulatory intervention.

Ben Verwaayen, BT chief exec, said: "BT has always argued that a market needs to develop in which those who are willing to invest and innovate can reap the rewards. This is a significant step in that direction.

"We now have a far clearer idea of how Ofcom sees the market developing and we share their view that competition based at the infrastructure level will be good for everyone and for the UK in general.

"Their statements about regulatory certainty are crucial as we have enormously ambitious plans for the networks of the future and require that certainty for shareholders if we are going to invest the huge sums required."

The UK's telecoms industry is currently looking at BT's proposals to ensure that the detail matches the company's rhetoric. Last month BT signaled that it might be prepared to cut LLU costs for rival operators, after the regulator hinted that prices should fall. ®

and..

Industry warms to BT's LLU price cuts
By Tim Richardson
Published Thursday 13th May 2004 15:54 GMT

BT's decision to cut LLU costs has been - broadly speaking - welcomed by the industry.

Bulldog Communications - one of the few operators in the UK currently involved in local loop unbundling (LLU) - has applauded the cost reduction and BT’s apparent commitment to reduce costs further later this year.

However, Bulldog reckons that BT could do more and remains confident that there is still "scope for costs to fall further" following the completion of Ofcom’s LLU Market Review (announced today) which will attempt to bring UK costs into line with Europe.

Said Bulldog boss, Richard Greco: "Bulldog is delighted with this announcement by BT on the heels of the results of the first phase of Ofcom’s Strategic Telecommunications Review.

"We believe that the only way to ensure long-term value and choice for the British consumer is through competition. In a wholesale LLU-friendly environment, the UK will experience similar growth to our European neighbours, attract more investment in broadband technology, while giving UK consumers a much broader selection of innovative services, at more price points.”

Alternative telco, Thus, said it is "encouraged" by BT's decision to move on LLU before being forced to act by the regulator. Richard Sweet, the company's Head of Regulation, said: "We welcome Ofcom's first consultation document on its local loop unbundling market review.

"We look forward to reading the document in detail, but are encouraged by BT's announcement on further price reductions as Ofcom's commitment to addressing the thorny process issues, which contributed to the failure of LLU first time round. Ultimately this should lead to increased innovation, choice and value for consumers."

Wanadoo UK (formerly Freeserve) - which has already said it would be prepared to offer broadband and communications services direct to punters - is also upbeat about BT's plans to cut LLU costs.

"We welcome Ofcom's consultation on LLU and BT's announcement today that it will be reducing the cost of LLU by 70 per cent over the next few months, bringing it in line with European pricing.

"Cutting LLU costs will trigger a real broadband revolution in the UK by allowing Internet Service Providers to offer new, more flexible packages independent of BT's network," concluded the ISP. ®

eircomtribunal

BT: "We now have a far clearer idea of how Ofcom sees the market developing and we share their view that competition based at the infrastructure level will be good for everyone and for the UK in general."

Funny how Ofcom's statement that it considers its predecessor Oftel's regulation concerning LLU "embarrassing" and would look at the option of cutting up BT has focussed BT's mind.

A 70 % reduction of LLU pricing for the UK...

Unfortunately ComReg will shortly grant Eircom one of the highest LLU prices of Europe. And even this may not stop Eircom to drag ComReg through the courts; they have already made plenty of noises via their hired US consutant.

P.

Some background info, if you haven't seen it yet on:
http://www.comwreck.com/blog_10_feb12.html