AOL to open up local telephone network in the UK to new competition
AOL today announced its decision to make a substantial investment in a 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.
AOL's decision to invest in telecoms infrastructure in the UK follows Ofcom's recent mandates on LLU and the Strategic Review of Telecommunications, which has laid down the regulations and targets that BT must adhere to as it opens up its local telephone network to competitors.
Karen Thomson, Chief Executive and Chairman of AOL UK Limited, said: "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 £50m, will take place in the first half of 2006 and reach up to 300 exchanges in the UK, equivalent to 20% of UK households. If successful, AOL may extend this rollout to up to 1,000 exchanges in the UK, based on an estimated additional investment of £70m, in order to be able to offer the possibility of 'unbundling' the telephone line for more than 50% of UK households. AOL's investment in the local telephone network in the UK is being funded by parent company Time Warner.
Thomson added: "The opportunity to compete on a level playing field with the incumbent will encourage substantial investment in digital services and content in the UK. This will allow the UK to catch up with leading European countries, where unbundling is already delivering higher value services to consumers. We look forward to working with Ofcom and BT to bring these benefits to British homes."
AOL has completed beta testing of the LLU process in two London exchanges, Battersea and Ealing and has created a team of more than 100 people in the UK to carry out a large-scale LLU rollout. AOL's unbundled services will be ADSL 2+ compatible, creating the potential for broadband services of more than 8Mbps in the future.
The AOL Internet service and AOL Talk are provided to UK subscribers by AOL Europe Services SARL, a company in the AOL group based in Luxembourg. AOL has more than 1.1m broadband subscribers out of a total of more than 2.3m members in the UK, as at November 2005. AOL members in the UK spent more than two billion hours connected to the Internet during 2005.
Further AOL information:
http://www.broadband-123.co.uk/aol.html
Labels: aol-broadband
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