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Goodbye LLU say hello to a virtual future world
Saturday 11 October 2014 10:46:17 by Andrew Ferguson

Earlier in the week the European Union announced the reduction of the amount of regulation involved with two telecoms markets. Voice call origination and fixed access markets are now largely off the EU telecoms regulation radar, the reasons given are:

  • Increased use of VoIP
  • Competing providers able to provide fixed telephone access through the nationally regulated wholesale products
  • Growth of mobile versus fixed line communications
  • The reality that in bundles of telecoms products, the telephony access is becoming the least important element and stand-alone fixed telephone access is declining.

Given the level of complaints and moans every time a fixed line retailer increases its voice line rental this seems at odds with the basic member of the public, who invariably feels that while broadband is the more important element of fixed line telecoms in 2014, a lot of the costs have been moved to the small print.

The continued rise of voice line rental is balanced by the fact that broadband costs have plummeted since its launch and going further back into the late 1990's people will remember the costs of dial-up access.

Neelie Kroes in presenting the decreased red tape has also endorsed the concept of virtual unbundling, which should be no surprise to UK broadband followers since the EU gave the green light to Openreach VULA products back in 2010. Virtual unbundling means that for fibre heavy deployments like FTTC and FTTP the EU is accepting that due to the costs of rolling out active and optical networks we are unlikely to see competing networks deployed to the same extent as has been done with copper LLU.

Certain criteria need to be met for VULA to be accepted, such as local access for handover of the data stream, guaranteed bandwidth and sufficient control to allow for product differentiation. The local access means that LLU hardware is not totally defunct, it can still be used to handle the bitstream and voice traffic which is handed off to the cheapest network available in each area.

Ofcom still has a key role to play and the fibre world is waiting to hear what the result of the TalkTalk fibre broadband pricing complaint is, if TalkTalk does get the wholesale cost of FTTC halved we might see fibre demand jump, as TalkTalk would be able to offer a bundle of fibre and voice line rental for under £20 a month, even when you ignore all the normal incentives to join. Oddly cheaper FTTC might make TalkTalk less keen to spend £5 million on a trial FTTP roll-out in York.


Posted by dogbark over 2 years ago
"the fibre world is waiting to here" should be "the fibre world is waiting to hear" perhaps?
Posted by andrew (Favicon staff member) over 2 years ago
Fixed - should not really be here as its a Saturday, but so much to do.
Posted by TheEulerID over 2 years ago
LLU is going to be a big issue in making best use of the existing copper network. The necessary ANFP restrictions applying to cabinets in order to allow co-existence with exchange-based DSL significantly restrict the reach and performance levels that could be achieved.
It's difficult to see LLU operators accepting a forced write-down of much of their exchange-based equipment in favour of VULA services.
Posted by JNeuhoff over 2 years ago
"It's difficult to see LLU operators accepting a forced write-down of much of their exchange-based equipment in favour of VULA services."

Not at all. Any provider who was betting on outdated copper-wire technology knew about the risks of their exchange equipment becoming obsolete because of fibre lines.
Posted by TheEulerID over 2 years ago
LLU operators certainly invested in their DSLAMs knowing that fibre might (slowly) erode their usage. However, what they certainly did expect is that MPF would remain usable for exchange based DSL services in light of the existing ANFP.
If the ANFP was to be revised to optimise service from cabinet based services at the expense of exchange ADSL, then I think they'd object mightily. (Of course it would take a while - there aren't enough FTTC cabinets to service all the lines in most areas).
Posted by Blackmamba over 2 years ago
Hi broadband Watchers
As the take up rate (15 %) on the FTTC incress the Exchange Equiptment card / ports are made spare and worthless was it a good investment for the likes of Talktalk and Sky and other service providers.
Posted by TheEulerID over 2 years ago
As long as the cheap LLU exchange services are "good enough", then they will clearly have a big part to play in the most cost-conscious part of the market. Of course, if wholesale FTTC costs come down (and I suspect they will), then that gap will narrow. However, I don't see them reaching LLU ADSL price points.
I rather think the LLU MSANs have got quite a lot of "book value" in the ISPs balance sheets, so I think taking a write-down would be painful.
Posted by andrew (Favicon staff member) over 2 years ago
Given broadband is in use by around 80% of households and still climbing. FTTC takeup still has a long way to go before exchange hardware is wasted. Plus modern msans are part of gea handover and voice services plus other business services potentially
Posted by Blackmamba over 2 years ago
Hi Broadband Watchers
The Exchanges with EO lines that have access to a FTTC will be effected most and this is speeding up each week as the customers require service and the 15% will rise quickly. I expect the Q2 2014 is near the 17% mark.
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