Broadband News

AOL sets itself up to compete with BT

This morning AOL has announced it is setting up a new telecoms infrastructure in the U.K. to bring more competition and innovation to the local telephone network. This move, which was not a surprise to many in the industry, is placing AOL at the heart of UK telecoms and gives the company the opportunity to vastly increase its customer base and revenue.

AOL believes Ofcom's recent mandate on LLU bundled with the Strategic Review of Telecommunications has been key to give it a level playing field with BT.

"We finally have the opportunity to bring large-scale competition into the UK 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 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."

Karen Thomson (Chief Executive and Chairman), AOL UK Limited.

AOL will be spending approximately £50m in the first phase in the first half of 2006 to reach up to 300 exchanges covering 20% of UK households. If this is successful, AOL is going to consider expanding up to 1,000 exchanges with an extra £70m investment required covering 50% of UK households. The funding for the project is coming from parent company Time Warner. Unbundled services will be "ADSL2+ compatible" to cope with broadband services in excess of 8 Mbps.

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