Kingston pulls out of unbundling

Unbundling is another year away claims Kingston

Kingston Communications slammed the unbundling process Thursday, claiming delays and problems mean operators wont realistically be able to deliver nationwide ADSL this year.

The comments elaborated on Kingston's decision to delay rollout of ADSL services, -- effectively withdrawing from the current unbundling process. The decision comes on the back of poor financial results. Unlike Thus, which withdrew from the process earlier this week to concentrate on delivering ADSL via BT's wholesale offering, Kingston is not abandoning unbundling completely. Instead it intends to launch a national rollout of ADSL services in the spring of next year, and will continue to take part in unbundling for business customers.

Unbundling of the local loop is being implemented across Europe to allow greater competition in the broadband Internet market. The process sees telcos installing their own equipment in incumbents' telephone exchanges. Unbundling is intended to create a more competitive and cheaper way of delivering broadband services.

But according to Kingston, the process in the UK has been too piecemeal to allow operators to offer services in 2001. "It has been an imperfect process," says a spokesman. "There are not enough exchanges concentrated in the same area and the process is not proceeding in a manner that has enabled a residential service this year."

This will come as a blow to Oftel, the organisation charged with coordinating unbundling. It has already come head to head with the European Union over conflicting timetables for the process. Currently only one operator in the UK is offering an unbundled service and only four exchanges are ready for other operators.

Despite a wave of industry criticism, Oftel still insists it has acted "swiftly and decisively" on unbundling but admits that residential services will not to available immediately. "Residential services are obviously going to take longer because we need to get equipment into more exchanges," says an Oftel spokesman. Many firms will concentrate for the time being on business services, he says, although he hopes that this will change "later this year". BT has agreed to open up 600 of its 6,000 exchanges by the summer.

Kingston was among the telcos which complained bitterly to the government in December about BT and Oftel's role in unbundling. BT has been slammed by Oftel for deliberately slowing the process. In its turn Oftel has been criticised by the government for its delays in sorting out the issues of unbundling.

Nine operators have now withdrawn from the process which originally saw 28 telcos signing up to offer services. Analysts claim the current market slump and the lack of available funding is also to blame for operators withdrawing from the process. The European Competitive Telecommunications Association (ECTA) has expressed concerns that the lack of unbundled services in the UK compared to other European countries could create a fresh monopoly for BT in broadband.

The news that matters is not the puff, that BT expects to cover "half the population of the UK" with ADSL capability by early summer, and will have reached 70,000 subscribers by April. What Guy Kewney thinks matters is -- whether the various super-powers in the comms business can agree a way of doing business. Go to AnchorDesk UK for the news comment.

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