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Redstone's broadband strategy ‘on track’

Warns other telcos will drop out of LLU

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Redstone Telecom said today that its broadband strategy was "on track" and that it would soon be launching an ADSL trial in Portsmouth.

The pilot project will test Redstone's distant location technology for local loop unbundling which works without having to install kit within BT's telephone exchanges.

Instead, Redstone will fit street cabinets adjacent to BT exchanges which will provide DSL services to its customers.

A spokesman for the telco said that the accepted wisdom is that broadband suppliers need to be in BT exchanges to offer broadband services over the last mile of copper wire.

But he claims Redstone has proved that it is possible to work around the technology limitations of distant location and offer comparable services.

And after restricting its roll-out of broadband to a number of urban areas, Redstone reckons it will be able to move to a "cash positive position" without the requirement for further financing.

However, while Redstone believes it's boxed clever on LLU and is set to reap the rewards, it is also believes the fall-out elsewhere has benefited its operation.

Announcing its results for the nine months to December 2000, the telco said that the troubles affecting other telcos had benefited its operation.

"The competitive landscape has also changed in our favour, with more than 30 per cent of operators who initially planned to participate in LLU having withdrawn to date citing the difficulties with the process or costs as their reason.

"We expect the fallout to continue. Our distant location strategy has limited our exposure to most of the difficulties our competitors are facing in LLU," it said.

Redstone revealed that the total operating loss for the nine months to the end of December increased to £22.9 million from £5.7 in 1999.

Turnover during the same period rose threefold, from £20.3 million in 1999 to £60.8million for the nine months to December 2000.

At lunch, Redstone's shares were down 6p (7.14 per cent) to 78p. ®

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