BTopenworld denies cheating

BTopenworld says it gets no special favours from BT while competitors throw more complaints at Oftel
Written by Jane Wakefield, Contributor

BTopenworld denied Monday that it is given preferential treatment by parent company BT but admits it will not be taking part in unbundling.

The denial comes as rival operator Energis (quote: EGS) submits a second complaint to the telecoms watchdog Oftel outlining its dealings with the telco over the rollout of ADSL. It follows a joint complaint from a group of operators, asking Oftel to ensure that BT competes fairly with other operators in the rollout of broadband services.

BTopenworld's chief executive Ben Andradi claimed that the Internet arm of the telco operates on a level playing field with other operators. "I reject any idea of preferential treatment. We get no benefit from Ignite [the network arm of BT which supplies wholesale ADSL to operators]," he said in an interview with ZDNet News. He admitted, however, that BTopenworld will not be taking unbundled services from BT, despite it widely being regarded as a cheaper alternative to buying wholesale ADSL.

"We have a good competitive offering from BT Ignite. We are confident, that as part of the BT group, we will continue to get a good deal. Others are motivated by their own agendas," said Andradi. "There are many views of local loop unbundling, some say is will be a great bonanza, others that it will be a whimper. It is a very uncertain future."

BTopenworld was set up in April as part of the telco's restructuring plans. It encompasses all of BT's Internet businesses but is concentrating on its broadband plans. It has always claimed that it is treated in exactly the same way as any other operator but Demon, which buys wholesale ADSL in the same way that BTopenworld purchases it, complained in March that BTopenworld was getting preferential treatment from the telco.

Rival telcos Energis and Colt (quote: CTM) have also become extremely angry over the tardy way the local loop is being unbundled. Unbundling is widely regarded as the best option for them, if they wish to share a slice of the broadband pie.

Energis' regulatory affairs manager Karen Hardy claims BT currently "has an advantage over the rest of us", because BTopenworld is already rolling out ADSL services. Although other operators can buy wholesale ADSL, Hardy does not see that as a viable alternative to unbundled local loop. "If we buy BT services, we are letting BT dictate our business," she said.

Energis wants Oftel to deal swiftly with its two complaints and is convinced there is only one solution. "BT should take part in the bidding for exchanges as the other operators have to," she said.

Hardy dismisses Andradi's claims that BTopenworld is competing equally with other operators and is not surprised it will not be bidding for local loop space. "That is because they own the local loop. It is not a level playing field."

Ovum analyst Tim Johnson believes BTopenworld is obliged to take services from its parent company, but is sure that the high rates BT charges for wholesale ADSL is helping subsidise the service. "BT's wholesale charges work out at about £80 a month per subscriber. BTopenworld is subsidising this [it charges £39.99 per user]. It is greatly to BT's advantage to set the wholesale rate high and the money it gets from external operators can be put into its own services," he said.

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