With seven million of BT's (NYSE: BT) lines being used by competitive players such as Sky or TalkTalk, it's safe to say that the Ofcom's, the UK's main telecom regulator, bet on local loop unbundling (ULL) has paid off.
What contributed to the growth of the UK's competitive broadband market was an agreement reached between BT and Ofcom in September 2005 where BT developed its Openreach wholesale division to give competitors access to its copper and now its fiber (including both Fibre to the Cabinet and Fiber to the Home) networks.
Although a part of BT, Openreach is a functionally separated entity that deals with BT retail and its competitors in exactly the same way in terms of terms of prices, systems, and commercial relationship. "It's an interesting commercial model, and I think that the creation of Openreach as that access provider is one of the things that have led to such a competitive environment at the retail layer," said Tim Whitley, Group Strategy Director, BT Group, in a previous interview with FierceTelecom.
Competition in the UK's broadband market has come a long way. Consider this fact: in 2005, there were only 123,000 unbundled lines in the UK and consumers had no other option but BT for their phone and broadband service.
UK consumers and SMBs can now choose from over 30 different service providers offering unbundled services. Not surprisingly, greater choice has driven down broadband prices to about $20 a month, making it more attractive to more users.
And the broadband adoption numbers speak for themselves. Since September 2005, broadband adoption by residential users and SMBs has risen from 37 percent to 71 percent.
- see the Ofcom release here
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