Thus scraps unbundling plans

UK telco Thus has become the latest company to scrap plans to set up high-speed internet equipment in BT's local phone exchanges.

Thus, which unveiled improving financial results today, said it is unable to justify the economics of installing DSL (digital subscriber line) equipment into BT's exchanges.

The telco said that while it is still highly committed to offering its customers broadband services, it has decided to step back from installing its own infrastructure and equipment and will offer services using BT's wholesale product instead.

Keith Monserrat, director of legal and regulation at Thus, said: "We have played an active role in the unbundling process and are committed to rolling out broadband services to our customers."

"We have assessed the economic cost of doing this and made the judgement that it is not economically viable in this current climate to deploy our own infrastructure in the local exchange," he added.

Thus, which said it had adopted a cautious approach for installing equipment in BT's exchanges, said it was "perhaps better value" to roll out broadband services using BT's wholesale service in terms of risk and time to market.

The news will be a blow to telecoms watchdog Oftel which said earlier this month that it was encouraged by the degree of commitment shown by many operators to ensure that the unbundling process can proceed according to agreed timetables.

An Oftel spokesman said: "After the industry meeting Oftel held earlier this month, an agreement was made to bring forward access to the next wave of BT's exchanges. It is up to individual companies to decide whether to offer services. The opportunity is there and we hope there is an uptake."

In December, Bill Allan, chief executive at Thus, told MPs at a Trade and Industry Select Committee meeting that BT's delaying tactics and failure to engage in meaningful contract discussions with its competitors had made it difficult to plan and provide an economic service.

Thus joins a growing number of companies that have cut back plans to participate in unbundling including WorldCom, Versatel, RSL communications, Telewest and NTL. Energis said it has also been forced to scale back its plans to supply high-speed internet services.

Analysts have warned that offering services via unbundling will be hard to make money from. Tim Johnson, of research firm Ovum, said earlier this month that it will cost a new competitor to offer DSL servicesmuch more than it costs an incumbent.