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Broadband access competition sharpening in the UK

BT is gingering Ofcom to “level the playing field” in UK broadband. via a report from Plum Consulting which makes a case for changes to the way LLU is charged to competitive unbundlers. Under the current regime it estimates BT to have lost-out to price distortion to the tune of £623 million over nine years.

BT therefore wants the LLU payment strucuture looked at again since, it claims, Ofcom has now achieve its policy goal of “driving competition deeper into the network,” so it no longer needs to set low LLU prices to encourage competitive operators into the market.

BT points out that its share of just 31 per cent (when most other incumbents have managed to hold onto between 41 and 52 per cent of their markets) proves that it’s time to take the trainer wheels off the challengers.

John Petter, BT consumer CEO said: “TalkTalk and Sky have enjoyed subsidies for the best part of a decade but it is time for that to end. Both are successful companies and both are more than capable of standing on their own two feet. It is particularly unfair that BT has to give Sky a commercial leg up when they consistently refuse to provide us with fair access to their own services.”

No word from the challengers yet, but no doubt they will say it’s crucial that the structure stay in place if the UK is to maintain its current level of competitivness and low prices in broadband.

Meanwhile, the other big UK access provider, Virgin Media, is showing how useful its technology is if you want to create flexible speed tiers. It has introduced a new 152 Mbit/s top speed tier (take that, BT) and is upping its entry-level product to 50 Mbit/s (from 30 Mbit/s) and its intermediate 60 Mbit/s tier will enjoy 100 Mbit/s.

And BT continues to hammer away at its broadband offers with endless direct mailings and television ads. One letter came my way today actually. Trouble is, I am already a valued BT broadband customer. They know my address of course but haven’t seen fit to filter their list to stop sending me better offers for a service I’ve aready bought.

More carrier news: Telefonica used the last day at Mobile World Congress to slip out the news that it was battening down the hatches in response to an 8.5 per cent drop in revenues. It managed to grind out a net profit increase of 16.9 per cent by way of compensation.

But it’s also announced that it will ‘streamline’ itself in pursuit of €1.5 billion in cost savings and that means that out goes Telefonica Digital, the division set up in 2011 in London with the task of tapping into OTT growth and developing digital services to strengthen the Telefonica whole.

Telefónica claims it’s decided to put everything back together again with what were the digital activities and expertise put to work across the company to improve its position in the digital ecosystem - the digital division proved was such a success, in other words, that it did itself out of a job.

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