UK LLU pact will not translate to Ireland – BT

6 Oct 2005

BT’s group strategy director Clive Ansell has told that the settlement for BT’s operational separation of its fixed-access business into an access services division has seen local loop unbundling (LLU) quadruple in the UK in the past fortnight.

However Ansell explained that such an arrangement between incumbent BT and Ofcom, the UK’s equivalent of the Commission for Communications Regulation (ComReg) here, cannot be translated as easily to Ireland in terms of the impasse over LLU between incumbent Eircom and ComReg. Ansell was a panelist at ComReg’s CEO Forum today in Dublin.

“Peace has broken out,” is the term Ansell used to describe the pact that he predicts will result in an onslaught of new services into the UK market. In recent weeks Ofcom and incumbent operator BT published the finalised settlement for BT’s operational separation of its fixed-access business into an access services division, to be branded ‘openreach’ and designed to become the vehicle for achieving true equivalence of access for BT’s competitors. This settlement will have direct effects on BT, its wholesale customers and wholesale competitors, as well as on the UK’s retail markets.

Meanwhile in Ireland, LLU is continuing at a slow rate with licensed operators complaining about the lack of an automated system for LLU, lack of service level agreements and issues surrounding number portability. The issue sparked a High Court case between Eircom and ComReg during the year, with Eircom emerging victorious. However, in recent weeks it emerged that the regulator and Eircom have come to an arrangement whereby Eircom will specify its interpretation of market requirement determination in terms of wholesale services on 24 October.

Ansell said it would be impossible to use the BT/Ofcom solution as a template for Ireland as it involves more than 264 particular undertakings unique to the UK market. The BT/Ofcom solution also comes after more than two decades of deregulation in the UK. The Irish telecoms market only deregulated in 1998.

His view was echoed by Eircom CEO Dr Philip Nolan during a Q&A at this morning’s conference: “There are more than 246 undertakings and each one is unique. It would take a fair amount of study and we can’t just do it head on.”

Ansell agrees with this assertion: “There are components that are transferable, key products that are bottleneck products. You need to be able to deploy fully equivalent access and that means that every part of BT uses the same systems and everything we do is identically the same as well as having deadlines and penalties. In Ireland, they would need to pick the products they wish to resolve. It is a localisation question.

Describing the UK telecoms market in the aftermath of the BT/Ofcom deal, Ansell said: “It has got a chance of success and most operators in the UK will give it a run … This will result in product launch announcements from other players in the market because it creates a much larger cake.

“Setting up the access division was a strong and positive move. As a result, the rate of LLU take-up in the few weeks since this has quadrupled.

In conclusion, Ansell explained that BT cannot reduce prices on its retail DSL products until some 1.5 million LLU lines have been unbundled across the UK. “We will effectively hold down retail-level competitiveness until everyone in the market is in a viable position.”

By John Kennedy