Energis drops broadband investment

Telecoms operator Energis (quote: EGS) announces Tuesday it will scale back investment in the local loop as a result of BT delays.

Unbundling of the local loop -- in which other operators gain access to BT's telephone exchanges -- is now a legal requirement, ratified by the European Union's Council of Ministers on 5 December. It is widely seen as an essential part of opening up telecoms markets across Europe and concreting the government's vision of universal cheap broadband Internet services across the UK.

Energis' decision will come as a further blow to the unbundling process which has already seen five high profile operators withdraw completely. It also reflects an industry wide belief that BT is deliberately making it happen as slowly as possible. Energis' comments come as part of a select committee enquiry set up in response to complaints and lobbying earlier in the summer. E-minister Patricia Hewitt and Oftel boss David Edmonds have already been hauled over the coals by the select committee and Tuesday it was the turn of the rival operators.

Head of carrier relations at Energis Anne Machim admits the telco is scaling down its rollout plans as a result of delays. She claims the amount of time it takes BT to allocate exchanges makes it difficult for operators to draw up realistic business plans.

"Because of delays we are going forward with less exchanges than we had hoped." Expect more delays, Machim says. Even when equipment is installed she claims it will take up four months to get services out to the public.

Also present at the select committee, Cable and Wireless' vice president of public policy Emma Gilthorpe summed up the group's attitude to BT's behaviour. She accuses the telco of "tactical obsfication". "They are doing very little to facilitate this process."

Another problem for operators is BT's insistence there is no space in exchanges. Technology development director of Kingston Huw Saunders complains about the "paucity" of information from BT about the amount of space available in exchanges. "BT never took a proactive stance on letting us know what space was available. BT failed to grasp the scale of demand," he says.

According to Cable and Wireless, the delays have meant BT has gained crucial competitive advantage. The telco has already installed its own ADSL in 200 exchanges. Cable and Wireless' Gilthorpe believes BT has also given unfair advantage to its ADSL service provider BTopenworld. "It is important that BT is not allowed to continue to reap value from that," she says.

All attendees, including chief executive of telco Thus (quote: THUS) Bill Allan accuse BT of acting anti-competitively and welcome recent steps by Oftel to move the process along. Describing it as too little too late, operators believe Oftel was forced to act. "The reason we have had action is that the situation has escalated and the government has realised that if it wants an e-enabled Britain you need a level playing field," says Gilthorpe.

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