NTL funds unbundling boost

Telecoms and cable television provider NTL will spend £65m on placing its equipment in BT telephone exchanges -- a process known as local loop unbundling (LLU).

As the rollout of broadband Internet access became an issue at the height of the telecoms bubble, LLU was tried with poor results by a number of alternative telecoms operators. In the end, most opted for simply reselling BT's wholesale ADSL lines.

However, in recent months LLU has been seen as an option. Just days ago UK telco Cable & Wireless -- now the owner of Bulldog -- said it will spend £100m on LLU, targeting around 400 exchanges, mostly in urban areas.

NTL, unlike Bulldog and others, does own its own network, built out and extended through a series of acquisitions over the past 15 years or so. However, in an interview with the FT today, the cable operator's chief executive, Simon Duffy, said it is now more cost-effective to extend the reach of its broadband offering through LLU.

NTL is targeting 300 BT exchanges, trying to satisfy demand from customers who reside outside its network's area of coverage. NTL currently passes just under three million homes.

The renewed optimism surrounding LLU follows price cuts by BT in the spring this year that make the process 35 to 70 percent less expensive to other operators. The move was welcomed by regulator Ofcom, which had been trying to get LLU prices in line with those in some other European countries.