The good, the bad and the ugly

uSwitch.com looks at how local loop unbundling (LLU) has affected broadband users.

On the eve of Openreach’s first anniversary and with the number of households on unbundled telephone lines set to double this year, Steve Weller, Head of Communications Services at independent price comparison and switching service uSwitch.com, looks back over the year to see how local loop unbundling (LLU) has affected broadband users.

“There is no doubt that the long-awaited creation of Openreach triggered a huge investment in the broadband industry last year, resulting in a consumer uptake that Tony Blair could have only dreamed about. In January 2006 there were just over 10 million broadband users and one year on there are over 13 million users, a growth of 30%. However it’s been a rocky ride along the way and we are hoping that the journey will be smoother as Openreach enters its second year.

The Good

“Local loop unbundling – or LLU – has provided broadband companies with more flexibility over the amount they charge consumers for their broadband service. This has resulted in some amazing deals on the market as companies have aggressively sought to sign up as many new customers as possible in a very short time frame. Broadband prices fell by up to 17% last year, triggered by the launch of TalkTalk’s ‘free’ broadband last April, and look set to fall further in 2007.

“Consumers have also enjoyed a far greater choice of broadband services as LLU has spurred companies previously inexperienced in the broadband sector to enter the arena. TalkTalk, traditionally a landline company, and Sky, a broadcasting company are now major players in the market with over 613,000 broadband customers between them and this year we’re going to see mobile phone companies also stepping up to the challenge.

“Broadband users are also enjoying much faster connection speeds as companies install their own super-fast technology into the BT exchanges. Faster speeds will be all the more important this year as new broadband television services are launched, such as ITV’s new free to view service.

The Bad

Unfortunately the surge in demand for LLU services placed an enormous strain on the already limited number of Openreach engineers, and customers have experienced longer than usual lead lines for resolving line faults, switching or even getting connected in the first place.

“Additionally, as lines have been transferred from the BT network to LLU, customers have experienced a raft of service interruptions. Orange, as an example, suffered a major broadband service failure, which at its peak affected 100,000 customers within its LLU network.

The Ugly

“Lower costs, faster speeds and more choice should in theory be good news for consumers, but in reality has led to a customer satisfaction freefall with a record 2.8 million broadband customers not satisfied with their service, a drop of 16% since March 2006. Customer complaints ranged from waiting months to receive their broadband connection, hours being spent on hold to customer service when problems are experienced, and service interruptions – to name but a few.

“However, the most worrying issue facing LLU customers this year is how they can switch smoothly and successfully to a new broadband provider. MACs, the codes that customers need to pass on to their new provider in order to switch smoothly, simply do not work when moving from one LLU provider to another, and customers are unfortunately going to find this out for themselves when they decide to switch their broadband service this year. The good news is that Ofcom has recognised the issue and is now working to resolve it and we will be keeping a close eye on their progress.

Weller concludes: “Ultimately, Openreach has heralded a new era for home communications. Broadband is now there for the taking – it’s up to consumers to make sure they are getting the best deal, and the industry to continue its efforts to make broadband accessible to all.”