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High prices kill BT sub-loop unbundling order test

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BT has pulled the plug on its sub-loop unbundling batch order trial due to lack of demand, which was due to high prices.

In a letter to interested parties BT Openreach’s head of infrastructure products Katherine Roche said she was putting the proof of concept trial “in abeyance” until demand picked up.

Roche said Openreach had not received a “successful order” in the past six months and expected none. She said she would brief the industry soon on the issue.

“The product will not be launched as part of R1800 in Nov(ember) 2011,” she said. R1800 is the next version of Openreach’s 18-month rolling product roadmap.

A BT spokesman said this trial was different to the physical infrastructure access (PIA) trial, the pricing of which has been condemned by communications services providers (CPs). She said Sky, Fujitsu and Callflow were trialling the PIA.

“Our PIA trials have not been suspended. In fact, they are going well,” the spokesman said. “What has been suspended – for now – is a trial of a SLU service where orders could be batched together. This is because no triallists came forward despite being invited to in February.”

They were to test Openreach’s ability to complete five orders on the same day at the same street cabinet as well as CPs’ ability to batch five orders for the same cabinet.

She gave no reason why BT had been unable to attract a “successful order” for the  batch ordering system.  An industry source invited to try the batch order system told Br0kenTeleph0ne, “If it’s too expensive in the first place, it is hardly surprising no-one wants it.”

BT published its price list for PIA earlier this year to howls of protest from the rest of the industry, and warnings that no-one could afford to take it up and still be able to compete with BT.

A consortium led by Fujitsu Telecom, TalkTalk and Virgin Media warned earlier that BT’s prices were four to five times higher than Openreach’s costs, and called for Ofcom, the regulator, to get BT to lower them.

The PIA trial itself was seen by some observers as BT’s ploy to create uncertainty in competitors’ pricing for projects funded by BDUK. BDUK recently announced how it would distribute some £430m to help fund access to high speed broadband in rural areas.

BT has a virtual monopoly in rural areas, and Virgin Media CEO Neil Berkett warned at the weekend that the government risked entrenching BT’s monopoly.

BT struck back in The Times, which reported BT warning “there is a high risk that local councils could waste (half a billion pounds) by backing unsustainable community projects that will not benefit rural communities.”

Sub-loop unbundling costs were also the focus of disputes between Openreach and Thales and Digital Region Ltd, who alleged that BT was overcharging and that Ofcom had erred in setting Ofcom’s prices too high.

Ofcom issued a draft determination in June which found in favour of the plaintiffs, and invited comment on its decision.

Here is the Roche letter:

Subject:SLU Batched Orders Trial – proposal to place in abeyance

To the SLU IWG :

 I am writing to advise that due to insufficient orders, the proof of concept trial for the SLU Batched Order development will be placed in abeyance until such time that sufficient industry demand exists to reconsider. To confirm the product will not be launched as part of R1800 in Nov 2011.

Following indicative prices notified to industry in Jan 2011, interested participants were invited to join the trial in February 2011 with the joint objective to trial Openreach’s ability to complete 5 orders on the same day at the same PCP as well as CPs ability to batch 5 orders for the same PCP. As we have not received a successful order during the past 6 months (and with none forecast), we have been unable to test the concept and our procedures with the Openreach Service and Operation teams. This means we are now unable to satisfy our internal Operational governance procedures in order to launch with R1800 in November.

A briefing to industry will be issued shortly and should you have any enquiries regarding this matter, please contact either myself or your normal SRM

Kind regards

Katherine Roche

Head of Infrastructure Products


(Number removed on request)


Written by Br0kenTeleph0n3

2011/08/31 at 16:02

Posted in News

Tagged with , , ,

2 Responses

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  1. The batch process was supposed to offer price reductions of ~20% over current SLU pricing, so I guess the lack of interest in the trial reflects a general lack of interest in SLU.

    There is some oddity in the pricing structure that means Openreach charge more to connect a sub loop to a competitor’s tie pair than they charge for an equivalent activity *plus* supply and installation of CPE and DSLAM port when they supply FTTC. But as all the data is a pair of scissors it’s hard to understand.

    It doesn’t look like the Openreach SLU prices of £106.62 / £127.61/ £93.96 have yet been revised following the Thales complaint where some cost elements were required to be removed ?


    2011/08/31 at 20:59

  2. […] itself is controversial. BT introduced it at Ofcom’s request. The first reference offer drew howls of protest from the industry. A second offer cut prices some 40% to 50%, but introduced some new […]

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