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ntl to relay on BT for network expansion

# 23 September 2004, 15:21 by Frank

Cable company ntl is to invest around £65 million to co-locate its switching equipment in around 300 local exchanges operated by arch-rival British Telecom.

The initiative will give NTL access to a further two million households, to which it plans to offer broadband and interactive viewing services using BT’s last-mile copper connections.

It appears that ntl has been prompted to embark on the rollout plan by recent reductions in the local loop unbundling tariffs charged by BT.

From Tuesday’s Financial Times:

“Simon Duffy, NTL chief executive, said that made it much more cost-effective for the group to expand its customer reach through local loop unbundling than by rolling out its own cable network.”

Meanwhile, Cable & Wireless has also revealed its plan to reach around a third of all homes and businesses in the UK via local loop unbundling (LLU). The company says it will invest £50 million this year on the development of its broadband Internet services, with another £35 million to be spent in 2005.

According to Jupiter Research analyst Ian Fogg, this is all slightly ironic though.

However, there is real irony here. In 2000, ntl bought Cable & Wireless’ UK cable assets for many millions. ntl then went into chapter 11. Now, just a few days before ntl, Cable & Wireless has itself announced LLU investments. Earlier this year C&W acquired one of the UK’s few ISPs focused on LLU, the troubled Bulldog.

For ntl, Local Loop Unbundling offers another way to supply its virtual ISP customers, as well as market service directly to consumers outside its cable franchises.

Why anyone would choose ntl over any other DSL retailer remains to be seen.

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