Pipex to kick off LLU migration

Let's be careful out there

By Tim Richardson • Get more from this author

Posted in Telecoms, 3rd April 2006 14:57 GMT

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Pipex is to begin shunting punters onto unbundled exchanges from this month as it looks to cash in on its investment in local loop unbundling (LLU). The UK ISP had already revealed plans to install its kit in 100 BT phone exchanges, enabling it to provide broadband services direct to end users.

Now it's in a position to begin migrating customers, although such a move is not without risk.

Wanadoo UK, for example, is already moving its broadband users onto LLU exchanges, but a number of connections are failing, leaving customers without broadband for weeks on end. Wanadoo's line on these snags is that LLU is a "new and complex technology" and faults happen from time to time.

The latest LLU update from Pipex comes as the ISP revealed that a jump in broadband customers last year helped increase revenues and pre-tax profit during 2005.

Publishing results for the 12 months to the end of December, Pipex revealed that turnover hopped 30 per cent higher to £133m from £102m. Over the same period, pre-tax profit rose from £6.2m to £7.1m.

As of the end of December, the number of broadband users hit 283,000 - up 47 per cent on the year. At the same time, average revenue per user (ARPU) fell from £25 a month to £23 reflecting a fall in broadband pricing. In a bid to combat this drop, Pipex is trying to flog more and more services and is already lining up voice calls and wholesale line rental (WLR) as alternatives.

"We believe that the sale of these bundled services will increase average revenues per customer over the year and help protect margins," the firm said today.

Indeed, Pipex's recent acquisition of Homecall (the fixed line telecoms business of Caudwell Communications) for £43m reveals that, of the 500,000 new punters it acquired, 35,000 take more than one service.

Indeed, following the acquisition of Homecall, Pipex now has more than a million punters (including 390,000 broadband users) with three in ten taking two or more services.

The publication of today's results coincided with the news that Pipex has received a cash injection of $25m from Intel to launch Pipex Wireless, a new operation that is to roll-out the ISP's WiMAX service. ®

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