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UPDATE UK ISP TalkTalk Confirms Plan to Deploy BT Based Fibre Optic Broadband

Posted: 07th Oct, 2010 By: MarkJ
best broadband talktalk ukBroadband ISP TalkTalk UK ( AOL , Tiscali , Opal ) has confirmed plans to launch its own 'up to' 40Mbps FTTC broadband packages, which would make the provider BT's first significant wholesale customer for the operators new "super-fast" Next Generation Access (NGA) products.

TalkTalk's Chairman, Charles Dunstone, confirmed to the FT yesterday night that they were "working on a commercial launch". Last week a TalkTalk spokesperson told ISPreview.co.uk that any rumours the provider was laying its own fibre optic lines, in competition with BT, were "factually inaccurate" but then failed to reply when we queried about their other options, including FTTC.

Analysts have long warned that BT's fibre optic broadband network would not provide an adequate return on its £2.5bn investment, unless it could attract some big wholesale customers. However TalkTalk and Sky Broadband have both previously shunned the new NGA services, which don't offer enough control for big ISPs to differentiate themselves from rivals.

None of this has stopped TalkTalk running its own FTTC trials. Back in October 2009 they became one of the first UK ISPs to publish a customer speedtest from their "Fibre Optic Broadband Trial" at the Muswell Hill telephone exchange in North London.

talktalk fttc speed graph

Since then BTWholesale has made some modifications to its FTTC products, although TalkTalk hasn't detailed precisely what it's planning to do. We know they have FTTC trials already, but adoption of the forthcoming Virtual Unbundled Local Access (VULA) FTTC alternative appears to be more plausible.

Earlier today Ofcom mandated that BT provide VULA to ISPs (here), which allows competitors to deliver services over BT's new NGA network with a degree of control that is similar to that achieved with unbundling ( LLU ) of existing broadband products. By contrast Sky Broadband still has no known plans to launch such a service and is staying tight lipped about the future.

UPDATE 1:31pm

A few moments ago TalkTalk kindly furnished us with a more complete statement.

A Talk Talk Spokesperson said:

"Ofcom’s statement today is broadly in line with the consultation conducted in March however there are a few notable improvements that will help ensure that UK consumers will continue to enjoy a choice of innovative and competitive ISPs.

The wholesale product that BT and Openreach must offer must be designed to allow ISPs such as TalkTalk more flexibility to develop their own products. In particular, the product should be uncontended, unmanaged and not artificially capped, provided on a 'wires-only‚' basis and must be unbundled so that ISPs can provide the installation themselves rather than having to use an Openreach engineer.

We are also pleased that Ofcom have introduced a framework to prevent anti-competitive pricing by BT, particularly the so called margin squeeze where they squeeze the price between the wholesale and retail products. While we welcome Ofcom's decisions we still think that there is room to improve this further."

This appears to confirm, albeit loosely, that TalkTalk will be using BT's VULA based FTTC product. Once all is said and done we would predict some kind of service launch in mid/late-2011.
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