BT Chief Sees No Threat From BSkyB Broadband

BT Group chief executive, Ben Verwaayen, has told reporters on a conference call that his company sees no imminent threat from BSkyB’s entry into the broadband market, instead stating that every customer it procures from cable rivals is essentially another customer returning to its network.

The BT boss welcomed increased competition in the broadband arena, predicting that BSkyB’s broadband product would put pressure on cable rival NTL to reduce costs and become more focused. NTL will complete its takeover of rival Telewest later this year, creating a combined cable operator with a footprint covering nearly 50% of British homes (see Cable Giants Tie Up To Tackle Sky).

“Sky’s broadband footprint is in the cable areas, and every customer it takes away from cable ultimately comes back on to our network,” Verwaayen explained, adding that although BSkyB’s broadband product may put pressure on its own internet business, its local loop unbundling programme would contribute to the growth of its wholesale arm. “LLU is an important ingredient in the mix, and important part of our new wave revenues,” he said.

Unbundling BT’s exchanges, a process in which broadband operators can install their own equipment, generates revenue for BT through a one-off payment and an annual rental charge per customer connecting via the exchange.

An increasing number of broadband operators are unbundling their services from BT exchanges, allowing faster access speeds and, consequentially, a larger number of services to be offered.

Video Networks’ HomeChoice is one such service, providing customers with ‘triple play’ services of internet, phone and video on-demand. The business was rumoured to be in BSkyB’s sights, with speculation that the company’s video on-demand product could be slotted easily into Sky’s core offering. However, last month saw the satellite superpower swoop on internet service provider EasyNet, acquiring the company for £211 million to begin building its own online infrastructure (see Sky Nets ISP For Triple Play Services).

Meanwhile, HomeChoice has announced plans for a national roll out of its services, more than quadrupling its coverage to give a footprint approaching the size of the combined UK cable companies (see HomeChoice Plans National Roll Out To Rival Cable).

BT: 0207 469 2337 www.btplc.com