BT denies network sell-off rumours
Published: 07 Jan 2002 13:23 GMT
Suggestions that BT might accept a multi-billion pound bid for its entire fixed-line telephony network were strongly denied by the company on Monday.
Speaking to ZDNet UK News, a BT spokeswoman was adamant that the company wouldn't even consider such a demerger. "There is no truth in this idea. The fixed-line network is a core asset, and there is no way that we would sell it," the spokeswoman insisted.
A report in last weekend's edition of The Observer claimed that incoming chief executive Ben Verwaayen was considering splitting BT by selling off the fixed-line telephone network -- often referred to as the company's crown jewels.
German bank WestLB recently offered BT £18bn for its fixed-line network -- including the network backbone and local exchanges. The bid was turned down, as was an £8bn offer for just BT's local exchanges from financial consortium Earthlease.
Some experts believe that splitting BT could provide a boost to the availability of broadband services in the UK.
If successful, both Earthlease and WestLB would lease network capacity back to BT, and also to rival operators. Under local loop bundling (LLU), telecoms firms can already place their telecoms equipment in a BT exchange and sell services such as ADSL to ISPs or directly to customers.
However, LLU has been very slow to take off. BT claims that the slump in the telecoms market has made it harder for LLU operators to raise the money needed to cover installation costs -- which in some cases can cost as much as £80,000 just to install equipment in one exchange.
According to some observers, if a third party owned the network then it might be more economical for rival operators to gain network capacity, and offer wholesale telecoms services in competition with BT.
One senior BT insider recently told ZDNet UK that such a model could make more sense than LLU. "Rather than letting them install their own kit alongside our equipment, why not just let them share the network?" he said.
BT's official line, however, is that such a move is certainly not on the cards.
The vision thing
BT's chairman, Sir Christopher Bland, said in an interview this week that BT could become a rival to satellite broadcaster BSkyB. Speaking to The Sunday Times, ex-BBC chairman Bland said that BT was considering a wide range of options in its battle against the likes of ntl and Telewest -- which offer television and movies as well as telephone and Internet services.
Late last year, BT applied for a broadcasting licence -- leading to suggestions that the company was set for a multimedia future.
"At one extreme, we can be a distributor of other people's programmes, just as the existing cable companies do," Bland said. "On the other extreme, we can build a fully integrated model like BSkyB, which makes and distributes its own programmes over its own and others' networks and also distributes others' content over its own system."
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