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  BT to open broadband tunnel network

 

Reuters

BT plans to open up its underground cable ducts to allow rivals to lay their own high-speed broadband networks, in a move that could appease critics but hurt income for the group's wholesale division.

BT said on Monday it could provide open access to its ducts in a move to help extend high-speed broadband coverage across Britain.

However, BSkyB said it does not have any plans for wide-scale fibre services at present although it said it supported the idea of open infrastructure.

Carphone Warehouse and its Talk Talk unit said it would consider launching its own trial to investigate its options further.

The move by BT follows a debate over how telecoms firms should best roll out a high-speed network and create competition in the sector. It also follows criticism by opposition politicians who have said BT's network should be more open.

'Other companies already have access to our exchanges so we're relaxed about providing them with another form of access as well,' Chief Executive Ian Livingston said in a statement.

'Although it's unlikely to be the silver bullet to get fibre to every home, open access to all ducts, not just ours, might help BT and others extend coverage and so we would like to see a future government support such a move.'

BT currently allows access to its existing copper network by providing wholesale lines. Alternatively others can insert their own equipment into an exchange, via the BT Openreach division, to secure greater control and profitability.

Opening up a duct would provide a new option to access fibre. In return BT hopes it could also have access to ducts owned by other companies such as Virgin Media to boost its own presence, a move rejected by Virgin in the past.

BT is spending 1.5 billion pounds ($2.34 billion) on an optical fibre network that will increase download speeds 10-fold. It hopes to secure a return on its investment by providing fibre products on a wholesale basis to rivals such as Carphone and BSkyB.

Opening up its ducts would allow its rivals to create their own networks, meaning BT could see less of a return via its Wholesale division.

Rolling out a separate fibre network however would be expensive.

'BT is taking a considerable degree of commercial risk by rolling out fibre and it will be interesting to see if others are willing to join us,' Livingston said.

Daiwa analyst Michael Kovacocy said he thought it could be easier for rivals simply to rent BT fibre.

'This might be much less attractive and much more difficult a proposition for competitors than many have been led to believe,' he told Reuters 'Perhaps making the reselling of BT's fibre-solution a more desirable option.'

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