BT walks away from discussions with Eircom

26 Apr 2006

BT has withdrawn from industry negotiations with Eircom which were aimed at improving provision of broadband on a wholesale basis to alternative telecoms operators.

In a statement released yesterday, BT Ireland CEO Danny McLaughlin said the move was made “with great reluctance”. The timing of BT’s move could cause some raised eyebrows: Eircom is currently undergoing due diligence ahead of a possible buyout by the Australian investment bank Babcock & Brown. McLaughlin said he did not believe that a future change of ownership at Eircom would bring a more progressive approach.

Negotiations between Irish telecoms operators have been taking place since December 2004 and have centred on implementing automated processes for rival operators to offer broadband services using local loop unbundling (LLU) over Eircom’s network. This process would allow operators to install their own equipment in Eircom exchanges, allowing them to offer a wider range of services, such as broadband, to businesses and consumers instead of just reselling services that Eircom currently provides.

McLaughlin claimed that the telecoms regulator ComReg does not have sufficient powers to improve the situation and said that BT would explore “all options available” to ensure that the right market conditions exist to drive competition.

Eircom expressed surprise at BT’s decision which it said would “derail the process” and urged the regulator to help resume talks.

ALTO, the representative body for rival telcos, expressed frustration at the lack of progress in LLU. “The working group established by ComReg, which our members joined in good faith, has failed to make any impact,” said ALTO chairman Tom Hickey, who claimed that Eircom was abusing its dominant position and effectively ending the prospect of LLU for the foreseeable future. “We understand BT’s frustration in withdrawing from the working group and it is a frustration shared by other members of ALTO,” he said.

Damien Mulley, chairman of the consumer lobby group Ireland Offline, criticised ComReg, claiming the regulator had failed to bring about LLU for the past five years. “I have no faith they can [bring about LLU] in the next five judging by past performance,” he added. “We feel that until Minister Dempsey sends directives to ComReg on LLU the status quo will remain.”

By Gordon Smith