Telcos consider consortium to fight BT

The few remaining telcos left in the local loop unbundling process may unite against BT in their effort to provided services

Energis is considering forming a consortium with the remaining unbundling players to share costs, after talks between Energis and BT broke down at the weekend with Energis calling the unbundling process now partially "dead".

Creation of such a consortium would reflect moves in the mobile operator market where licencees are considering sharing the price of rolling out third generation networks.

Energis director of regulatory affairs, Carl Gibson, said he was unhappy with BT's attitude at the talks -- mandated by regulator Oftel -- designed to increase competition in the broadband market. "As with many discussions with BT we argued about what we were there to discuss," he said. "BT didn't believe that they had to offer an-end-to-end wholesale product." With wholesales prices three times higher than Gibson believes they need to be, the telco has taken its dispute back to Oftel. "It is terribly draining to have to fight BT at every turn and the more Oftel dithers the less appealing the process will be."

Gibson said that with a price tag of £150,000 per operator just to get into exchanges, unbundling is far too expensive and needs to be supplemented with a wholesale product. "With only four or five operators left, we are not going to be able to afford to get into every exchange," he said. Another telco, Redstone, has got around the cost of getting equipment into BT's exchanges by locating outside but this is not a viable option for most, according to Gibson. "It is very tempting but unless you are right next door you are talking about using another loop. The larger the link the more the service is diminished, so it is in our interests to get inside."

The history of unbundling has been a fraught one. It was originally seen as a way of ending BT's stranglehold of local phone lines and allowing other operators to offer cheap broadband services.

Now it is a shadow of its former self with only a handful of the original players still interested in the process. Energis has cut back its investment following months of frustrating negotiations with BT and now its attempts to thrash out a wholesale product has failed.

Meanwhile Gibson is sceptical the government has any chance of achieving its ambitious broadband goals and is sick of hearing about BT hitting its targets. "Every time I pick up a newspaper I see BT rolling out the same old line about hitting its targets but not one other operator is in its exchanges and not one customer has seen a service."

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