Unbundled broadband exceeds six million connections

Ofcom hails success of 2005 agreement with BT to open up local access

Other ISPs can install equipment at BT exchanges

The number of “unbundled” broadband connections in the UK has exceeded six million for the first time, according to regulator Ofcom.

“Unbundling” allows rival ISPs to install their own equipment in BT exchanges so they can deliver services to households and businesses without having to re-sell lines bought on a wholesale basis from BT.

The rapid growth in unbundling started in 2005, when Ofcom negotiated a deal with BT to set up the Openreach local access division to offer services to other ISPs.

At the time, there were only 123,000 unbundled lines in the UK, according to Ofcom figures. Now the total has passed six million, while the proportion of households and small business with broadband has grown from 37 per cent to 65 per cent.

Unbundling has allowed ISPs to offer highly competitive packages because their profit margin is greater. For example, Sky offers free broadband to some of its satellite TV customers, and several ISPs provide free laptops with their broadband connections.

According to Ofcom research, prices have dropped significantly as well - consumers were paying on average £23.30 plus VAT a month for broadband in the last quarter of 2005, while today they are paying around £13.61 for the same service.

"In just four years unbundling has gone from a flicker on the dial to a major competitive force in telecoms. This has delivered the dual benefits of driving up broadband take-up and driving down prices," said Ofcom chief executive Ed Richards.