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O2 refuses to deny plans to offload home broadband product

Sale may happen after converged core migration completes, source tells El Reg

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Exclusive UK telecoms provider O2 has refused to deny that it is planning to offload its fixed line home broadband product later this year.

According to a source close to the situation, O2 - which is currently undergoing an upgrade of its broadband service over to a single core network - is mulling over a sale of its local-loop unbundling (LLU) consumer broadband product.

It's understood that a would-be suitor will consider taking the service off O2's hands only once the converged core migration is completed.

The Register has learned that that upgrade has in fact been delayed. The 35-week work was originally scheduled to be finished in around October 2012, according to an operational update issued to the telco's staff in February last year.

But O2, the trading name of Telefónica UK Limited - majority-owned by Spanish parent company Telefonica - has now confirmed that the upgrade won't be completed until the middle of this year. A spokesman at the company told us:

[W]e are going to experience a small delay in this project (from the original plan) to converge several of our networks onto a single core network, one of which is broadband. Some flexibility was always required as the work has to be carried out on an exchange-by-exchange basis which has caused this delay to happen.

Our original plan was to have this complete by the end of Q1 this year but we now aim to have this project finished by the end of June 2013.

However, the future of O2's home broadband product looks uncertain, according to our source, who - talking on condition of anonymity - claimed that it felt as if the mobile telco was squeezing all it could out of the fixed line service before potentially selling it off to the highest bidder.

It's understood that BSkyB wonks have recently visited O2.

When asked if it was true that O2 was considering flogging its home broadband service, a company spokesman simply told El Reg: "We do not comment on rumour or speculation."

In 2007, O2 became the first major ISP to make a commercial offering of ADSL2+ to customers, after it bought Be Unlimited for £50m in 2006.

Execs at O2 - which has been fixated on 4G - and senior people at Be have in recent months ducked questions about investing in fibre-to-the-cabinet (FTTC) technology for O2's consumer broadband service. ®

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