BT 2008 Annual Report Download - page 23

other communications providers. Of the lines provided to other
communications providers, 3.8 million were WLR analogue lines
(up 9% on 2007) and 0.9 million were WLR digital lines (up
31% on 2007).
Local Loop Unbundling
LLU enables communications providers to use the lines
connecting BT exchanges to end users’ premises and to install
their own equipment in those exchanges.
There are two types of unbundled line:
"
a fully unbundled line which gives other communications
providers the exclusive use of the copper line; and
"
a shared access line, which only gives other communications
providers the use of the high-frequency channel used for
broadband – the line will also be used by the customer’s
fixed-line voice provider.
At 31 March 2008, there were 12.7 million unbundled lines in
the UK, up nearly 20% on the previous year. Of these,
8.4 million were for BT lines of business, and 4.3 million were
for non-BT communications providers. More than 20
communications providers were providing unbundled services
from over 1,850 local exchanges and Openreach was fulfilling
more than 69,000 LLU orders a week.
Although the broadband market in the UK continues to grow
along with continued exchange unbundling, this process slowed
in 2008 as a result of market consolidation. Communications
providers are increasingly focused on improving customer
retention and acquisition by offering packages incorporating a
selection of broadband, voice, TV and mobile services.
Ethernet
Openreach continues to develop a comprehensive portfolio of
Ethernet products to support backhaul and access services for a
growing number of other communications providers.
One of the most exciting upcoming developments is
Openreach’s new backhaul product, Ethernet Backhaul Direct.
This product has been designed to meet the increasing demand
for high bandwidth backhaul capability from customers wishing
to connect their local access circuits back to their core networks.
It supports broadband applications such as video on demand,
which is now driving an increase in internet traffic. Additionally,
by realising the cost efficiencies of 21CN, Openreach is able to
offer a new, improved pricing structure for this service.
Openreach has also launched three new Ethernet products:
Street Access, Broadcast Access and CCTV Access, which give
communications providers opportunities to move into new
markets. Additionally, Openreach’s review of Ethernet circuit
resilience pricing lowered the price and extended the availability
of this option. Rather than a premium option limited to a few
products, Ethernet resilience is now a viable and cost-effective
option for enhancing service security.
Deploying fibre to the premises
In June 2007, Openreach completed an initial consultation with
communications providers about the deployment of high-
capacity fibre optic cable to premises and the delivery of
wholesale services over these networks to greenfield sites. From
August 2008, as part of an initial trial, Openreach will deploy
fibre optic cable, instead of copper, to homes on a new 1,000
acre site at Ebbsfleet Valley in Kent. Around 10,000 homes will
be built on the site, incorporated in 1.5 million square metres of
retail, leisure and community facilities.
At this site, Openreach will offer the communications industry
a wholesale fibre-based broadband product, facilitating
competition at a retail level. The service will be capable of
supporting speeds of up to 100Mb – the fastest headline speed
available to residential customers in the UK. This will make
possible a range of applications from HDTV gaming to near-
instant music downloads.
Building our twenty-first century network
The key driver behind our 21CN platform is customer choice.
21CN is our next generation platform that enables software-
driven, open innovation by BT, our customers and partners and
is critical to our transformation into a software-driven global
communications services company.
Following input from end users and communications providers
involved in our South Wales pilot, we have evolved our
deployment strategy from one focused on mass migrating
customers onto the new network, with new services becoming
available later, to one that delivers new services to customers
from the outset.
As a result of the new deployment strategy, new services,
such as 21CN Ethernet and 21CN broadband, will be offered to
customers during periods of voluntary take-up, after which
customers will be mass migrated, enabling the closure and
decommissioning of certain legacy platforms.
Through this new deployment strategy, we will be able to
deliver new services more quickly, with the associated benefits
of increased revenue potential and improved customer
experience. To date, 21CN has already delivered some £600
million in cost savings, relating to operating efficiencies and
reduced spend on legacy networks, and we expect to deliver
more savings in the future taking the total annualised savings to
at least £1 billion.
The 21CN programme has also been expanded to
accommodate the increasing focus on software-driven services,
as well as the potential of emerging technologies and the
demand from enterprise customers for additional functionality.
As a result, we will introduce the BT innovation platform during
the summer of 2008, which will enable us and others to develop
Report of the Directors Business review
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22 BT Group plc Annual Report & Form 20-F