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BT warns of broadband divide ahead of Ofcom review

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More than half of UK homes and businesses could be left without advanced broadband services if Ofcom continues to press ahead with plans to make the UK's telecoms sector more competitive, BT boss Ben Verwaayen warns.

Interviewed in The Sunday Times, Verwaayen argues that the regulator's preference for local loop unbundling (LLU) will lead to a new digital divide with rival telcos cherry-picking the most lucrative exchanges.

As a result, highly populated urban exchanges are likely to see investment from rivals. The same cannot be said for the vast majority of exchanges, though. Verwaayen estimates that all but 600 exchanges are uneconomic for LLU.

He told The Sunday Times: "What if your business is in Swansea or Southampton? We need to make sure that telecoms are available wherever business is located."

His comments come just two weeks before the latest phase of the UK's telecoms review.

In November, Ofcom published phase two of its Strategic Review of Telecommunications. While it rejected calls to break up BT, Ofcom warned that unless it made "substantive behavioural and organisational changes" - including giving rivals equal access to its wholesale product range - then it would take action against the UK's dominant fixed line telco.

BT's reply to that review is due next week but already industry insiders have told The Register that they fear Ofcom will "bottle it" and fail to impose the necessary changes needed to make the UK's telecoms sector more competitive.

Instead, sources believe that an inquiry by the Trade and Industry Select Committee (TISC) due next month will provide a platform to assess Ofcom's progress. Ahead of a widely anticipated Spring general election, it's thought that the intervention of MPs into the broadband debate could make an interesting issue for voters. ®

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