Orange moves fixed-line broadband network to BT

Orange currently covers around 65 per cent of the UK

Orange has signed a deal with BT to use the telco's network infrastructure in a bid to jump-start its position in the fixed-line broadband market, and take on competitors like Virgin Media and TalkTalk.

As part of the deal, BT will integrate Orange's existing broadband infrastructure into its own network, and around 60 Orange workers will transfer to BT.

The Orange network covers around 65 per cent of the UK, but taking advantage of BT's network will increase its capacity to almost the entire country.

A spokesperson for Orange said that its fixed broadband service is an essential part of the firm's UK strategy, and that the move will help increase its offering.

"We have entered into a closer partnership with BT Wholesale to allow it to build bespoke and dedicated network management systems for our fixed-line service," the spokesperson said.

"We believe that by doing so, we will not only be able to maintain and improve our network performance, but we will be well placed to take advantage of future technology developments as required."

Ian Fogg, a principal analyst at Forrester, believes that many other major internet service providers (ISPs) will have to make the same decision, as the development of next-generation broadband networks forces companies to re-evaluate their market strategies.

"Many ISPs are currently having to consider whether or not they want to invest in new fibre broadband networks, which could run into several billion pounds, or go down the wholesale route with BT, as Orange has today," he said.

"The other option for firms like Sky or TalkTalk is to stick to their current method of unbundling local exchanges to offer cable broadband services. The decision these firms make could affect themselves and the market for years to come."

In a move suggesting that TalkTalk is still pursuing the latter option, the ISP last week announced plans to unbundle a further 300 exchanges this year to offer customers new infrastructure for broadband services instead of BT's existing legacy equipment.

"We have currently unbundled just over 1,700 phone exchanges and are planning to unbundle a further 300, taking us to over 2,000 in total and pushing us to coverage of nearly 90 per cent of the population," wrote TalkTalk's communications director Mark Schmid.

Fogg added that companies like Sky, TalkTalk and Orange could decide to partner in order to spread the cost of developing their own next-generation broadband networks, but that Orange may well stick with BT after today's announcement.