AOL is to invest around £50m in the first phase of a new broadband local loop unbundling (LLU) strategy to wrestle more of the broadband access market from BT.
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At the moment, AOL relies on providing broadband services to its customers by re-selling BT’s services.
With LLU, it will be able to enter BT’s exchanges and set up its own equipment to offer its own tailored services direct to its customers.
AOL plans to “unbundle” over 300 BT exchanges in the first phase of its plan, which it says will give it access to around 20% of the UK population.
If the first phase is successful, AOL is considering unbundling a further 1,000 exchanges, which will allow it to reach the bulk of the UK population with its own products.
Over the past 18 months telecoms regulator Ofcom has been forcing down the amount BT can charge its competitors for entering its exchanges, and using part of its infrastructure to offer unbundled services.
AOL is now competing against the likes of Cable & Wireless’ Bulldog and France Telecom’s Wanadoo in the unbundled broadband market, as well as BT.
BT recently launched the BT Openreach division to fairly manage the needs of the unbundled broadband market.