LLU price drop lays foundation for NGN rollout

26 Jan 2010

BT has warned that the price drop for line share of local loop unbundling (LLU) in the Irish market outlined yesterday by ComReg is critical if Ireland is going to aspire to the rollout of a next-generation network (NGN).

In August, the Commission for Communications Regulation (ComReg) directed Eircom to reduce the monthly wholesale price for LLU line share it charges other operators from €8.41 to 77 cents. Eircom followed suit with a statutory appeal.

Last night, ComReg said the matter has been settled and the price of 77 cents for LLU line share will remain in place.

“This price drop is critical. BT is driving competition for wholesale and retail broadband by investing significantly in Local Loop Unbundling to provide up to 24Mb speeds to close to two-thirds of broadband lines in the country,” said Peter Evans, product director at BT.

“This development finally brings wholesale prices down to levels seen in the rest of Europe and builds a foundation for next-generation broadband services,” Evans said.

Magnet Networks CEO responds

The news was welcomed by Magnet Networks CEO Mark Kellett, who said: “This is positive news on line share and very welcome.  It demonstrates progress and gives great hope for the industry.  Looking to the future, the real challenge is the full unbundled price where operators can take over the full line to provide significantly enhanced phone and broadband services at very competitive prices.

“The current rate of €16.43 is amongst the highest in the EU and the proposed reduction is a positive step in the right direction but still remains out of line with our key economic competitors, most notably the UK where the LLU price charged by BT is stg£7.20 and under €2 in France.”

Kellett said he will continue to put pressure on ComReg to continue to review not only the fully unbundled charge but also ancillary charges imposed by Eircom.

LLU Line share is a product that Eircom is legally obliged to offer to competing operators.

LLU line share allows other operators to avail of access to the higher bandwidth part of the fixed line so they can provide broadband without providing a conventional voice telephony service, if they choose not to do so.

Communications Minister Eamon Ryan today also welcomed the Eircom/ComReg agreement . He said the agreement, which accords with Government policy on competition and open access, is a significant development.  The Minister welcomed Eircom’s commitment to the agreement so soon after the company was acquired by new owners, Singapore Technology Telemedia.

“This development is very welcome.  It is good news for broadband users who can expect increased competition, higher speeds and keener prices.  It is good news for DSL service providers whose ability to compete will be enhanced. 

“And it is good news for eircom who clearly see the wholesale broadband market as a significant market opportunity.  The drop from €8.41 to €0.77 represents a 90pc reduction in wholesale cost. I believe this is a major milestone where a mixture of strong policy and collaborative engagement are giving rise to good effect,” Ryan said. 

By John Kennedy

Photo: Peter Evans, product director at BT

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