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November 16, 2005

BT cuts LLU prices

BT Group Plc, the former UK telecoms incumbent, is to cut its Local Loop Unbundling prices by 40%. The carrier claims it is part of its strategy to stimulate competition, but it could equally be argued that it is a move to avoid intervention from the UK communications watchdog Ofcom.

By CBR Staff Writer

The price reduction will affect LLU operators connecting new broadband customers to BT’s LLU offering. From December 15, the price (excluding VAT) for new connections on the fully unbundled product will be reduced from 168.38 pounds ($289) to 99.95 ($171). BT will also be withdrawing the minimum term rental charges for both its shared and fully unbundled products.

This reduction follows the 70% reduction in total charges for shared LLU introduced by BT Wholesale in September 2004. With the introduction of these price reductions, BT claims that the UK is now ranked third in Europe on price comparison for LLU.

These price reductions clearly demonstrate BT’s ongoing commitment to LLU and are designed to create additional certainty and confidence for operators investing in LLU, said Steve Robertson, the CEO of BT’s Openreach unit.

Despite this, BT has been criticized for its complex LLU offering, with complaints rife about poor performance that has affected quality of delivery.

Competitor Cable & Wireless Plc did not respond to Computer Business Review’s request for comment on the announcement. However, in the past the company’s chief executive Francesco Caio has warned BT that the industry remains skeptical about its plans to open up the telecoms network to rival operators.

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