BT will resume investment if targets are met


31 May 2006

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BT Ireland chief executive Danny McLoughlin told siliconrepublic.com last night that the company would be prepared to resume its capital investment programme if certain milestones targeted by the Commission for Communications Regulation (ComReg) are met.

In recent weeks McLoughlin confirmed that the company had halted capital expenditure on LLU because of failure to agree terms with Eircom over enabling a seamless way for consumers to get broadband from other providers without disruption to their landline service. He highlighted the fact that 76pc of DSL connections in Ireland are with the incumbent Eircom.

A month previously BT, Magnet and Smart stormed away from negotiations with Eircom. However, last night ComReg revealed that the players were to return to the negotiating table today and follow a strict set of milestones that would see a sufficient product in place by 8 August. ComReg commissioner John Doherty said his organisation was “prepared to intervene robustly, if necessary.”

Speaking to siliconrepublic.com last night McLoughlin said: “There are two ways it can play out. We can get everyone engaged, which is doable, it’s a tight timescale, or go back to the old way of hand to hand, house to house fighting and once again the Irish consumer will lose out.

“We have reached an important watershed in our industry. We will see early on in the process whether there is a sufficient change in behaviour,” he said.

Asked whether the talks were made possible by Eircom’s forthcoming €2.36bn acquisition by Babcock & Brown, McLouglin said: “The transaction is not going to close for three months. This is a move by the existing management team and I am optimistic that something will be achieved here.

“I think the pace at which things will change will be seen through the industry’s investment. We’ve unbundled 45 exchanges, but would seek to unbundle another 100. We could we do that at a rate of three a week and get it done within a year. That would give us 75pc population coverage. We’d be prepared to work with ComReg and others as well as Group Broadband Schemes.

“We have the capital approval already and the faster we can achieve these milestones, we will get our orders in fairly quickly. Giving that we’ve done 45 we’ve learned from that and will accelerate the programme,” McLoughlin told siliconrepublic.com.

By John Kennedy