Broadband unbundler targets public sector

Up to 100 UK local telephone exchanges will be upgraded to offer symmetrical broadband services by the end of the year by Updata, a new entrant to the UK telecoms sector

Updata, which cut its teeth in the Danish telecoms market, announced this week that it is targeting the UK education market with a range of managed broadband services.

So far, Updata has contracts with two local authorities -- Bedfordshire and North Somerset -- and is running pilot projects in Pembrokeshire and Dorset. Vic Baldorino, Updata director, said his company is in talks with several other local government bodies about supplying symmetrical DSL services.

Under targets announced by the prime minister, Tony Blair, in November 2002, all primary schools must have a 2Mbps symmetrical connection and all secondary schools an 8Mbps one by 2006.

The availability of SDSL is still low in the UK and largely restricted to metropolitan areas such as London. Updata claims this creates a gap in the market compared to asymmetrical (ADSL), which is available to around 90 percent of the population. It hopes to persuade local authorities to use SDSL to connect up their schools, offices, libraries and even CCTV networks.

"ADSL isn't in our book," Baldorino told ZDNet UK. "Broadband must be symmetrical if it's a business link."

Updata's move into the UK market underscores the fact that while ADSL is approaching near-universal coverage, business broadband services are rather scarcer on the ground. Once it wins a contract with a local authority, Updata unbundles the local exchanges by installing its own SDSL equipment inside them.

Local-loop unbundling was meant to bring more wholesale competition to the UK, but over the past few years it has largely been a failure. Ofcom recently forced BT to cut some LLU prices in an attempt to breathe new life into unbundling.

These price cuts have encouraged some companies to look again at LLU. But according to Baldorino they did not benefit Updata at all, as they did not cover the product it buys from BT. Despite this, he claims that Updata's prices -- such as £70 per month per line on a three-year contract -- are much lower than other retail SDSL services.

At present, businesses located in an area that has been unbundled by Updata will not be able to get SDSL off the company. Updata has no immediate plans to sell SDSL directly to businesses, and the rules governing the use of public money restrict commercial businesses from sharing a network that has been set up to serve the local authority.