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::INTERNET & TELECOMS

Unbundling isn't working, says report
Friday, August 16 2002
by Ciaran Buckley

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A European telecoms group has criticised telecom incumbents for extending their dominance into the emerging broadband market and said unbundling isn't working.

The DSL Scorecard, published by the European Competitive Telecommunications Association (ECTA), shows the level and pace of broadband penetration across the European Union.

ECTA managing director Phil Evins claims that between 80 and 90 percent of DSL connections sold are provided by incumbents and that local loop unbundling is not working. He attributed this not only to the high up-front costs faced by competitors but also to excessive pricing and provisioning delays by the incumbents.

"The DSL market is growing rapidly, with almost 1 million lines added across the EU in the last quarter, taking the total to nearly 6 million," said Evins in a statement. "However, only 3 percent of these connections are over unbundled local loops.

"Put simply, incumbents are extending their dominance from retail voice into the new broadband market," Evins added.

The statistics do not show a correlation between the level of competition and the availability of DSL in a particular market.

Interestingly, only 1 percent of subscriber lines in the UK have DSL, even though 40 percent of the lines are provided by competitors to the incumbent. More than 5 percent of the German subscriber base has DSL, even though all of these connections were provided by the incumbent.

In contrast, Belgium has 363,000 DSL lines, providing access to more than 8.6 percent of the subscriber base. About 84 percent of the Belgian DSL market is served by the incumbent.

The report says that Eircom is the only telecom company that has provided DSL lines in Ireland but had only provided 997 lines to subscribers by the end of June, out of a total 1.6 million subscriber lines. Ireland has the lowest DSL penetration in Europe bar Greece.

Evins believes that policymakers need to enforce current competition rules and introduce new ones to ensure the development of a competitive broadband market in Europe.

ECTA is a European trade association whose aims are to assist and encourage market liberalisation and competition. More information is available at the ECTA Web site.

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