BT Heads Off Watchdog's Break-Up Threat

07 February 2005

Did BT jump - or was it pushed?

The UK telecoms giant has offered to further open up its network to ISP rivals in a bid to appease industry regulator Ofcom.

BT's move, which would cut wholesale broadband prices and provide a faster service, is in response to the watchdog's ongoing review of the sector and a warning that the company must offer competitors "real equality of access to its phone lines" - or face being broken up.

Central to BT's concessions is the setting up of an Access Services Division which would be "fenced off" from the rest of the group. It would allow ISP competitors, such as AOL and Tiscali, to access the local loop connection between its nationwide network and homes and businesses.

At the moment BT controls all but 30,000 of the UK's 25 million phone lines and charges for access to them. Ofcom wants to see one million lines unbundled every year for use by rival companies.

Says BT ceo Ben Verwaayen: "The UK has the opportunity to create the most exciting and innovative telecoms market in the world. BT has a critical part to play, and today we are making a set of far-reaching proposals towards that framework."

Ofcom ceo Stephen Carter is more circumspect: "As ever, real delivery will require real detail."

Comments industry analyst Ovum: "The overriding impression of the package is that BT has given a lot of ground at this stage of the review process ... We cannot recall another instance where BT has gone so far."

Data sourced from; additional content by WARC staff