LLU Unbundled UK Copper Phone and Broadband Lines Decline to 9.8M

The latest quarterly update from the Office of the Telecommunications Adjudicator (OTA) has revealed that the era of traditional pure copper line based Local Loop Unbundling (LLU), which gives rivals greater control over part of BT’s UK telecoms infrastructure, may be entering into a slow decline.

Unbundled lines (aka – MPF and SMPF) are mostly used by ISPs like Sky Broadband and TalkTalk, which have built some of their own kit inside of BTOpenreach’s network and as such have secured more control to differentiate their products and prices from those provided directly by BT itself.

The regulatory solution, which was introduced by Ofcom in 2005 to help break BT’s dominance of the UK market, has enabled cheaper and faster services to emerge in competition with BT’s own products.

However the latest update reports that the UK had 9.8 million LLU lines at the end of May 2016 (this excludes BT’s own lines), which is down from 9.84 million at the end of March 2016. The LLU installed base has been broadly stagnant since around October 2015, but over the past few months we’ve started to see signs of this downward trend emerging.

None of this is surprising because the related lines tend to reflect older ADSL2+ broadband and phone line services, which may be slowly going out of fashion. By comparison the more modern hybrid Fibre-to-the-Cabinet (FTTC / VDSL) “fibre broadband” services mostly come from BT, although the big ISPs also have a big share via a virtual (VULA) flavour of unbundling that can be taken alongside MPF lines; there’s now a total of around 6 million FTTC lines from Openreach and 4.1 come via BT (here).

Similarly the expansion of Virgin Media’s hybrid cable and fibre network, which is gradually moving into some areas where BT were previously the dominant infrastructure provider, might also be having an impact and lest we not forget BT’s own pure fibre optic Fibre-to-the-Premise (FTTP) deployment that is about to surge, or its imminent 300-500Mbps G.fast roll-out. Some smaller alternative ISPs (e.g. Hyperoptic, Gigaclear and B4RN) are also doing FTTH/P networks of their own in a few areas.

Some may ask why we don’t have an equivalent MPF LLU form of FTTC and the answer reflects a mix of both technical / cost challenges and regulatory dilemmas. Ofcom are in fact preparing for their next 2017 Wholesale Local Access Market Review (here), which will examine these issues and could conceivably make related services cheaper.

But the regulator will face a difficult balancing act because if they choose to go down the path to cheaper FTTC then they risk harming the investment case for the new generation of ultrafast G.fast and FTTP/H technologies, which might end up looking less attractive to consumers next to a cheap-as-chips FTTC service.

NOTE: There are also a few niche Sub-Loop Unbundled (SLU) VDSL lines by smaller ISPs that give a lot more control than VULA, but these can be quite expensive and more tedious to deliver. Bigger ISPs tend to prefer the easy life afforded by VULA.

Other Stuff

Elsewhere the OTA separately noted that BTOpenreach are planning to start using their new NTE5C Master Socket and VDSL Mark 4 filters from this month (see our Feb 2016 summary) and have advised that there will be a national launch using 3,000 engineers working on installation and repair activities.

Apparently Openreach will also continue to deploy the older NTE5A socket and VDSL Mark 3 filter as it manages the run down and build-up of old and new versions. “Openreach anticipate that NTE5C will be fully deployed by end of September 2016 when stocks of the existing NTE5A are exhausted,” said the OTA.

The new NTE5C is also helpful to support BT’s future services, such as G.fast broadband and standalone (naked) VDSL/FTTC broadband-only SOGEA lines that will be surfacing over the next few years. People ordering one of those products in the future may expect to have one of the new curvy NTE5C’s installed alongside.

Finally, the OTA has also re-confirmed that BT’s existing G.fast trials will be coming to an end on 30th September 2016 and the large-scale pilot, which is currently planned to take place in Cherry Hinton (Cambridgeshire) and Gillingham (Kent), should then begin at the very end of this year.