LLU logjam could impair €500m BT investment

9 Nov 2006

The “torturous” progress in relation to automating local loop unbundling (LLU) in the Irish market could adversely affect the €500m network investment plan announced today by BT Ireland, the company’s chief executive told siliconrepublic.com.

As well as announcing “solid” financial results for the first half of this year, whereby the Irish operations saw a 17pc increase in revenues to €257m, BT said it planned to invest a whopping €500m in its 21st-century network infrastructure across the entire island of Ireland over the next five years.

At the heart of the investment will be an upgrade of the company’s LLU infrastructure, resulting in the company’s ability to offer wholesale broadband services of up to 24MB per second. This, BT Ireland CEO Danny McLaughlin said, will usher in a new generation of businesses offering broadband television and other infotainment services.

“In the UK we are already offering customers BT Vision, an internet television service. It proves broadband is no longer just about PCs but about the living room too. It is for this reason that Sky is moving swiftly into broadband services.”

McLaughlin said that the €500m investment will see BT upgrade existing exchanges with next-generation broadband equipment from manufacturers like Hue Wei and Ciena.

The overall investment plan sees BT not only upgrading its current 45 unbundled exchanges but increasing this to 80 to 100 exchanges, giving the company a 75pc population reach.

However, he warned that the investment path will most likely be achieved faster in Northern Ireland than the Republic because of what he terms the “frustratingly slow” pace of progress in terms of automating LLU.

In April, BT and Magnet walked away from LLU negotiations with Eircom. After further negotiations ComReg succeeded in getting the industry group back on track with a detailed timeline of milestones to be achieved.

However, McLaughlin today indicated the precarious position BT and operators find themselves in if the transfer of customers from one operator to another is not automated.

“For a competitive and sustainable marketplace things need to move very quickly. The latest quarterly report from ComReg [Commission for Communications Regulation] was a disappointing read. While things are moving on, progress is slow. The easy bits of the plan have been done, the hard work is still ahead.

“If we cannot migrate customers smoothly on to LLU from bitstream (Eircom’s wholesale broadband service) it would have an impact on our investment. We need automation in order to provision customers quickly and easily. The customer experience in terms of LLU in Ireland is not any different than it was six months ago.”

McLaughlin said that for the company’s investment to make sense BT will have to migrate up to 20,000 customers from bitstream to LLU across its 45 exchanges. “At present we have only 2,000 LLU customers. It is a torturous process. We are selling bitstream but what we really want to do is migrate those customers to LLU.”

McLaughlin said that there is perhaps a six-month period before BT will start to see its investment plan impaired. “We have already began our upgrade path but the industry needs to get its systems in place in the next few months.

“The problem is not all Eircom’s fault. Other operators involved in the industry group need to complete their work too by creating matching systems to enable automation of customer transfer between operators,” McLaughlin said.

By John Kennedy