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I am grateful to the following people for taking part on the day: Ian Thomas, Director of Partner Services, Cable & Wireless, Benjamin Shrive, Data Reseller Manager, CPW Networks/Opal Telecom, Peter Glock, Head of Solutions Development, Orange Business Services, Lance Spencer, Product and Marketing Director, Tiscali Business Services. Apologies were received on the day from Matt Beal, Director of Strategy, BT.

What made you get into providing your own broadband network?

We started our discussion by establishing what had driven each of the operators to build their own next generation access network and what progress had been made.

Lance really summed it up for Tiscali, CPW and Orange, "the payback is so fast and so blindingly obvious if you already have the consumer base, if you don’t and you invest and then wait for customers to come there is a huge risk."

Ian Thomas explained that C&W had a slightly different experience. "Originally it was our customer base that drove us. When we sold the consumer side to Pipex, we looked at what we wanted to do with this [unbundled exchanges] asset, we realised we could be far more innovative in the business marketplace and get a lot more out there."

How many BT exchanges are you into now?

Lance said that Tiscali "currently have 800 exchanges, and this will increase to 1,000 by the end of 2008. This gives us 55% consumer coverage and 60-65% small business coverage".

Ian said that C&W "started with 400 and are now at 800 exchanges."

Orange do not publish the number of exchanges they have unbundled.

Benjamin said: "Carphone Warehouse Group has fully unbundled over 1600 exchanges. We could economically take this to 2000 if Ofcom LLU price review facilitates."

It is a fact that operators build network where the customers are and that there will be an almost total overlap between all the LLU operators. Lance raised the point that "some communities are very well served however once you get past the first 1500 exchanges there is only BT, its quite interesting to think about how this is going to pan out long term and how Ofcom are going to control the other 3,500 exchanges."

So what is your strategy for dealing with the channel?

Ian explained that Cable&Wireless have no intention of serving consumer or business customers directly. They target the 3,000 largest telecoms users globally, mostly large corporate and serve smaller organisations through distribution and resellers.

Lance told us that Tiscali only sell directly to consumers. All business customers are served via a channel-only strategy.

Peter added that Orange don’t have wholesale sales like other companies. The focus for broadband is on the consumer market not on the business market at all. Orange are not set up to leverage the wholesale market for broadband.

Benjamin: "Carphone Warehouse provides voice and data services to UK businesses through Opal, on both a direct and wholesale basis, and to consumers through AOL and TalkTalk."

What is your biggest challenge?

The common view expressed by all present is that they all think that in the B2B space that there is room for a much better SLA than the current Enhanced Care product. The fact that it was possible for BT to provide Total Care on leased lines and PSTN but not on DSL was a source of immense frustration. There seemed to be a universal suspicion that the lack of true business grade SLAs on broadband products was entirely due to BT trying to protect its own leased line revenues.

The counter argument was made that the weakness of the SLA on ADSL represents an opportunity for resellers to install a second LLU broadband line alongside the existing IPStream line. Load balancing and bonding routers are coming down in price and combining the two circuits into one service significantly increases the resilience.

The consensus was that BT Openreach had made improvements in the service they provide to the LLU operators however Ofcom could do a lot more to accelerate the development of the services that business customers need in the UK. It was felt that Openreach would be much more innovative if fully separated from the rest of BT.

So what does the future hold?

Ian said: "Well I think it’s interesting that a recent BBC article discussed the future of fibre for the home. With IPTV, IPCCTV, managed applications, you don’t need fibre to the home to do that you just need an ADSL that is not too far from the exchange. I think the stuff we will see later this year will be Ethernet which, for me is where the future is. It will unlock what normally only corporate users have to the SME market."

Lance said: "Bearing in mind BT still have 75-80% of the market. LLU is a great opportunity for the channel to take advantage. It is up to us to train the market and make the products simple enough for the channel to absorb. I don’t think Ethernet over fibre for the business market is going to go anywhere in the next 5 years. I think there is 5 years of copper usage in the business sector and on top of that managed services like IPCCTV, premium security, data streaming and conferencing."

Peter said: "We have 18-24 meg at the moment. There is a lot you can do with that and if you need more you can put another line in. The business market can afford it and in fact there may be benefits of having multiple connections going into multiple locations. Orange sees a future for mobile especially in bundling and tariff by-pass. There are plenty of access opportunities in copper, in other countries DSL is dying and Ethernet is taking over. WiMax is better suited to countries that don't have dense coverage of copper."

Benjamin said: "We have focused on building scale. Now we will look to strengthen our business wholesale offering, including B2B broadband (ADSL2), hosted services, SIP and Enterprise Ethernet."

There is a lot written about hosted applications. I asked the participants about their experience so far.

Benjamin said: "Opal’s heritage has been in providing network hosted applications such as call recording, IVR and other call management services. With our significant investment in our NGN the natural progression is now to combine these two differentiators."

Peter explained that Orange have a consolidation proposition combining data centre and communications services to provided hosted applications or full outsourcing, this is the Orange Business Services 'Business Acceleration' offer.

Lance said that they don’t provide hosted applications; we have the network and we allow other people to run their services across it.

Ian explained that Cable & Wireless were not going down the road of developing applications themselves. C&W are partnering up with various providers to take their capabilities and pass them over connectivity for resellers to sell into the market.

Source: Comms Business June.