BT rejects criticism, embraces broadband

British Telecom (quote: BT) is mounting a defence of its Internet strategy this week, claiming it is "passionate" about broadband, denying it has dragged it heels over rollout of ADSL and promising to convert from dinosaur to mammal as quickly as possible.

BT has been accused by the telecommunications industry, government and users of stifling the development of the Internet in the UK. AOL accuses the telco of "ripping off" users, Freeserve's managing director John Pluthero describes BT's rollout of ADSL as a "disgrace" and government has put immense pressure on the telco to reduce access costs and bring forward the timetable for unbundling the local loop.

With announcements that the incumbent telco has finished equipping over 400 exchanges with ADSL, that its IP network -- dubbed Colossus -- is also complete and that it is working hard on interconnect arrangements with other service operators, BT is taking the opportunity to pat itself on the back and hit back at detractors.

Network director of BT Paul Reynolds believes the rollout of ADSL to over 400 exchanges across the UK puts Britain at the forefront of the broadband revolution. "It is the fastest rollout we have seen in the world with a bigger reach than any other network in the world," he claims. "It is evolution and revolution. What we are doing in the network, the scale and complexity of it, is unprecedented and leaves BT and Britain well-placed for broadband."

Equipping 400 exchanges across the UK means the 21 service providers currently on BT's ADSL trial can now roll out the technology to anyone within reach of the exchanges -- around 25 percent of the population, concentrated on cities. New service providers will be taken on board in April, with services expected by the end of June.

For critics, though, the issue remains why it has taken BT so long to roll out the technology. Ovum analyst John Matthews is sceptical about BT's claims. "Deutsche Telekom has made similar claims and there has been a massive rollout of DSL in the US. I would be reaching for the salt pot," he says.

Matthews also questions the time scale of the rollout. "BT did an ADSL trial in Ipswich four or five years ago, which was technically successful," he says. "It was only commercial reasons that stopped them rolling it out nationwide."

BT's marketing director Angus Porter accepts there has been criticism but is keen to draw a veil over the past. "What's happened has happened but the speed we are now moving at is a speed not matched anywhere else in the world," he says.

He denies BT dragged its heels in order to protect its ISDN business -- a charge levelled by Freeserve's Pluthero -- and claims ISDN has a short shelf life in the future. "The ISDN life cycle is not long term and we are currently looking for a product that replaces it."

"ADSL's time has come," says Porter, who predicts 500,000 people will take up the service in the first year. He denies that, at around £50 a month, ADSL is too expensive for the mass market. "There are lots of people that will pay £50 and it is not so far adrift from what users pay in the US," he says.

Despite its huge resources, BT has been criticised for failing to keep pace with change in the Internet world. Porter admits BT has a challenge on its hands to compete with dotcom companies. "The big lumbering telco dinosaurs of Europe have difficulty in competing in the new world. The challenge is to convert from dinosaur to mammal as quickly as possible," he says.

Deutsche Telekom has already reacted to the backlash against European monopoly telcos by spinning off its ISP T-Online. Porter is not convinced that is the right way forward. "It is no secret that discussions are going on within BT and there are a number of ways forward. Deutsche Telekom's sell-off of T-Online crystallised share-holder value, but is that best for customers?"

On the issue of the local loop, BT is firmly sticking to its guns, claiming the July 2001 deadline is "the right one" despite pressure from the European Union to move the timetable to December of this year. "It is not just a question of what BT or anyone else wants. It is extraordinarily complicated and we do sometimes have to present ourselves in an unpopular way. It is simply not practical to move any faster," says Porter.

BT is simply making excuses, according to Guy Kewney. Go with him to read his news comment and opinion at AnchorDesk UK.

Tony Westbrook advises BT to 'Free the local loop'.

What do you think? Tell the Mailroom. And read what others have said.

See techTrader for more technology investment news, plus quotes and research.