Broadband providers energised by 65pc price cut

20 Mar 2008

The lamentably slow rate of progress of local loop unbundling (LLU) among alternative operators may be about to change as ComReg has ruled to drop the price Eircom charges operators for sharing lines at local exchanges by 65pc.

Using an EU-wide benchmark to come up with a new price for allowing alternative operators to access Eircom exchanges, ComReg said following a consultation on the matter that the revised price for line share should be €2.94, down 65pc from the current price of €8.41.

ComReg pointed out that LLU has been a significant driver of broadband penetration in the UK and France and that a large proportion of unbundled lines in these countries were done using LLU line share.

“It is therefore potentially a very important driver of LLU and by extension, broadband,” ComReg said today.

LLU line share allows an alternative operator to provide its own broadband product without having to resell Eircom’s wholesale broadband product and without having to provide its own voice capability.

The news was welcomed by BT Ireland chief executive, Chris Clark, who added that a review of LLU pricing in general is underway by ComReg. “We look forward to further significant reductions in full, unbundled LLU prices in the autumn to remove the barriers restricting this market.

“Eircom prices such as the €47 penalty (on top of the cost) to move our own customers to LLU is highly restrictive and is preventing mass migration to LLU as happens in other countries.

“LLU is good for the customer as it allows other operators to offer innovative services and greater speeds, whilst at the same time stimulating competition for investment in faster and enhanced broadband services from all providers including Eircom.

“Without the pressure of LLU how long would it have taken to increase broadband speeds in Ireland?,” Clark asked.

The Association of Alternative Operators (ALTO) described the move by ComReg as a welcome boost to its members’ efforts.

“In the past few months alternative operators have announced a range of products and investments to provide better broadband services to customers and the ComReg announcement should help this even further,” said Liam O’Halloran, chairman of ALTO.

Reiterating ComReg’s assertion that LLU has been a significant driver of broadband penetration in other countries including the UK and France, O’Halloran said: “LLU is the process where an operator can put his own equipment in an Eircom exchange and use the copper loop to provide services to the customer’s premises.

“The line share price is the price charged by Eircom for renting part of the loop so that alternative operators can provide their own data services like broadband and VoIP,” O’Halloran added.

By John Kennedy