BT and Vodafone LLU pact approved by Competition Authority

21 Aug 2009

The Competition Authority has approved a broadband joint venture between BT and Vodafone that will see BT open its unbundled local loop (LLU) to Vodafone.

The plan involves BT transferring its consumer, small business broadband and voice customer base to Vodafone. This will involve the transfer of some €4.8m worth of assets.

In a recent interview with BT’s Chris Clark and Vodafone’s Charles Butterworth (both pictured) said the aim of the plan was to address the lack of competition in the Irish local loop unbundling (LLU) market and effectively play to each of the company’s respective strengths.

The move will make Vodafone the clear no 2 in the fixed market after Eircom with over 170,000 fixed customers and a 15pc market share of the fixed broadband market. This agreement will see Vodafone take over BT’s 84,000 consumers and 3,000 small businesses.

In terms of LLU BT has to date unbundled 22 exchanges. The plan will see BT and Vodafone commit significant investment towards developing an enhanced broadband infrastructure with speeds of up to 24Mbs for approximately two thirds of available broadband lines by unbundling up to 58 additional exchanges.

They say the plan is to grow their combined local loop infrastructure from 20pc of today’s market to two-thirds and create one of the most progressive wholesale broadband operations in Europe. Under the deal BT will provide wholesale network services to underpin Vodafone’s business over a seven-year period.

“This partnership is good news for consumers and small businesses in Ireland as it creates greater competition and choice in the fixed line market,” Butterworth explained.

“Vodafone is now the no 2 player in the fixed broadband market and we will continue to deliver on our strategy of being Ireland’s number one total communications provider by offering real value and best in class products and services.

“This partnership will enable Vodafone to launch an exciting roadmap of fixed products and services that are strongly differentiated from those available in the market today, giving our customers better value and more choice. We look forward to welcoming BT’s customers to Vodafone and guarantee that all customers will benefit from enhanced value as a result of this move.

BT and Vodafone will work closely with customers over the coming months to undertake a seamless migration of services. They say customers will experience no change to their service in the short to medium term.

“This agreement will progress the Irish communications market by stimulating competition at both the retail and network infrastructure levels,” Clark explained.

“With increased competition comes greater choice and innovation, which is overdue in this marketplace. BT excels in the provision of networked IT services to business and public sector customers and we will accelerate our strategy to become the leading provider to those market segments.

“We are also committing significant investment into the advanced network infrastructure that customers and Ireland Inc. need to compete effectively,” Clark concluded.

By John Kennedy

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years