Structural separation has been a U.K. mandate for some time, but business pressures have forced Orange UK into a drastic move: The carrier is halting the build of its own broadband fiber network and will instead lease services from competitor BT. According to press reports, France Telecom-owned Orange cited poor uptake and low demand for its broadband services as impetus for the decision. The company currently has 840,000 broadband customers in the U.K.
TechWatch UK has some additional details:
Customers have been leaving Orange, slowly but steadily, for the past few years due to poor performance and service. The move will free resources Orange was spending developing its fixed line network, and allow the company to invest in making more attractive deals for potential broadband customers.
An article in The Times put forward the point that Orange had even considered abandoning its broadband strategy altogether, in the face of its decline. VP of Strategy at Orange, Bruno Duarte, told The Times: “We are not satisfied with where we stand with broadband, as our customer base is declining and our performance is poor. But we need to remain in fixed-line broadband so decided to fundamentally change what we are doing.”
Connected Planet’s take,
Dan O’Shea:
The U.K.’s structural separation mandate in this situation gives Orange a second chance to make a business out of a still-hefty customer base. It frees Orange from the costs of owning, operating and maintaining its own network. European Union Telecom Commissioner Viviane Reding, in pushing an EU structural separation mandate, long has used the U.K. as an example for how it can be done, though the market hasn’t proved her case very well, with the U.K. featuring less broadband competition than you might find in some other European countries. Orange is about to provide the policy with perhaps its highest-profile test yet.
If Orange can succeed in the U.K. market by leasing from BT to support its own services, what an ironic development that would be for the company that owns Orange, France Telecom. FT, like many European incumbents, has opposed structural separation in its native market.
Here in the U.S., where network unbundling without enough rules to guide it hasn’t worked out, we’ll be watching closely, too. Many U.S. broadband market participants and observers had been hoping that the Federal Communications Commission would give structural separation a shout-out in its National Broadband Plan, but spurring greater broadband competition may have taken a back seat to coverage expansion in the FCC’s eyes. The non-mention, however, has renewed the public debate, and both camps in that debate will be looking to see how well Orange proves their point.
That’s our take on this. Let us know what you think in the comments section below:
public debate, and both camps in that debate will be looking to see how well Orange proves their point.
Many U.S. broadband market participants and observers had been hoping that the Federal Communications Commission …….
You said is un acceptable
Many U.S. broadband market participants and observers had been hoping that the Federal Communications Commission …….