AOL To Invest In Local Loop Unbundling In The UK

by Robin Pilgrim, LawAndTax-News.com, London

23 January 2006

AOL on Friday announced its decision to take advantage of UK telecoms regulator, Ofcom's recent mandates on LLU and the Strategic Review of Telecommunications, which have laid down the regulations and targets that BT must adhere to as it opens up its local telephone network to competitors.

The technology firm revealed that it plans to make a substantial investment in new telecoms infrastructure in the UK, which will open up the local telephone network and related services to increased competition and innovation.

The investment will be made in 'Local Loop Unbundling' (LLU), which is the process that allows telecoms and Internet companies to replace BT as the provider of services over the telephone line from the local exchange to the phone socket in the home, known as the 'local loop'.

This will enable AOL to deliver Internet, telephony and other broadband related services, such as video on demand, television over broadband and advanced gaming services, directly to these consumers.

Karen Thomson, Chief Executive and Chairman of AOL UK Limited, explained that:

"We finally have the opportunity to bring large-scale competition into the UK's national telephone network. This will drive innovation and efficiency in the market, which I believe will result in consumers benefiting from greater choice, better value and new kinds of digital services."

The initial phase of the programme, costing around GBP50m, will take place in the first half of 2006 and reach up to 300 exchanges in the UK, equivalent to 20% of UK households. AOL may extend this rollout to up to 1,000 exchanges in the UK, based on an estimated additional investment of GBP70m, in order to be able to offer the possibility of 'unbundling' the telephone line for more than 50% of UK households.

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