AOL steps up broadband firepower
Internet giant AOL has become the latest firm to announce plans to install its own kit in telephone exchanges around Britain.
The company’s £50m move into local loop unbundling will increase its firepower in the battle to win broadband customers and enter the race to deliver television and video through people’s phonelines.
AOL has said it will invest £50m in the first half of the year into putting its equipment in 300 exchanges in major British cities and towns - and the decision will allow it to cut prices and improve service by no longer having to rent equipment from BT.
High speed broadband services are seen as the key to the next stage in home media, with companies competing to deliver packages incorporating internet access, telephone and television.
Increased competition in the market is expected to bring prices down substantially, as consumers faced with more choice put pressure on companies to deliver top quality service at low costs.
The installation will allow AOL to offer superfast broadband at speeds of up to 8Mbps and go head-to-head with BT, which owns the exchanges, and high-speed players Bulldog and Wanadoo which have embarked on their own unbundling programmes.
AOL chief executive Karen Thompson said: ‘The opportunity to compete on a level playing field with the incumbent will encourage substantial investment in digital services and content in 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.’
If the first stages in its unbundling are successful, AOL will invest a further £70m to reach its target of 1,000 unbundled exchanges. But the firm said it would not cover 100% of Britain, just exchanges where it was economically viable.
AOL’s move comes in the wake of Tesco’s announcement last week that it would start offering a broadband internet telephone service giving users cut-price calls. Landline calls in the UK and 20 foreign destinations including America, Canada and Australia will cost 2p a minute. Calls to UK mobiles will be charged at 10p a minute.
Tesco became the biggest consumer name to launch the technology known as Voice over Internet Protocol (VoIP), BT and Dixons already offer a VoIP package and globally the best known provider is American company, Skype – bought last year by eBay.
From ThisIsMoney.