Oftel accelerates BT network unbundling

UK telecoms watchdog Oftel has said operators will be able to have access to the most popular BT local telephone exchanges earlier than expected.

The move follows an industry meeting called this week by Oftel following concerns about the weak demand from BT's competitors for access to the telco's network.

From last week rival operators were able to make orders to place phone equipment in 25 of BT's local phone networks. But orders were only placed at 14 of these sites, with an average of one or two operators per site - significantly less than the number of companies that had expressed interest last September, Oftel said.

In recent weeks, many operators including RSL Communications and Versatel have all said they are abandoning plans to offer UK consumers DSL services, blaming delays and high cost.

According to Oftel, some of the operators who had initially requested space in September are not pursuing local loop unbundling at present, while other operators are waiting until top priority sites become available. Other companies are still concerned about co-location costs, said Oftel.

The regulator said an agreement to bring forward the popular exchanges in urban areas was reached at the meeting attended by BT and other operators interested in local loop unbundling.

Anne Lambert, Oftel's director of operations, said: "This was a constructive meeting. All who attended were keen to solve the problems that have arisen so that the unbundling process can proceed according to the agreed timetable."

"Oftel was encouraged by the degree of commitment shown by many operators and BT. Oftel, BT and operators are making very great efforts to iron out the problems that have arisen," added Lambert.

Oftel said it is working urgently with the operators and BT to address any other concerns, so that more orders are put in when further exchanges become available. BT has completed nearly 700 preliminary site surveys.

Tim Johnson, an analyst with research company Ovum, said: "It isn't surprising that there has been a slow start to taking up space. It's hard to make business plans which look profitable, and the combination of the economics of unbundling with the current climate for borrowing money has lead some companies to review their plans."

"It will cost a new competitor to offer DSL services much more than it costs an incumbent, and companies are being careful to do things that bring them money," added Johnson.

Richard Greco, chief executive of Bulldog Communications, said he applauded Oftel for its investigation into pricing and its efforts in bringing forward access to the most popular sites.

"It's a positive move to ensure that broadband services are made available to businesses and consumers around the UK as soon as possible," said Greco.