Openreach and the UK access network

Our Openreach access network business provides more than 450 communications provider customers, including other BT lines of business, with equal, open and economic access to the ‘first mile’ of BT’s UK access network. One of the industry’s vital infrastructure assets, this first mile links end users’ premises to local telephone exchanges, via fixed-line local and backhaul connections.
     Openreach’s 21,000 field engineers install, repair and upgrade lines, ensuring that households, offices and other premises have reliable local access to the telephony, internet and other services offered by their communications providers.
     Openreach is committed to delivering a better network and providing a local access and backhaul environment in which its customers’ businesses can thrive. Its focus in the 2008 financial year was to continue to deliver and comply with the Undertakings made to Ofcom, while driving efficiencies, providing the right levels of resourcing and enhancing service levels. Increasingly, it seeks to build mutually rewarding relationships with customers and to work with them on issues such as next generation access (the transition from existing local access infrastructure or technologies to next generation high-speed broadband access services), which are of key importance to the UK as a whole.

Improved service performance
In 2008, Openreach improved the quality of service delivery of all its products, significantly reducing the number of orders and fault reports that did not meet target delivery date. A significant reduction in ‘early life failures’ (faults on newly installed lines) was also realised by improving its quality of execution.
     Improvements in lead times offered to customers (see table above) contributed to improved ‘cycle times’.
     Achieving a step improvement in service performance was dependent upon reducing volatility and input volumes. Through flexible resourcing and processes, Openreach stabilised and improved levels of service, enabling it to cope with unexpected events, such as the floods experienced in the summer of 2007.
     Service involves more than just reactive provision and repair activity; it also includes the process of reinvigorating the access network infrastructure through investment in the local network – which leads to improved reliability, enhanced service standards and reduced cost. In 2008, Openreach invested around £35 million in a proactive maintenance programme, which reduced the number of access network faults by 10%. At the same time, the number of high-bandwidth services carried rose by around 20%.
   In addition to Openreach’s business as usual provision and repair activity, preparing telephone exchanges for 21CN meant it had to replace and recover 2.5 million jumper wires.

Network improvements in 2008       Service improvements in 2008 – average offered lead times across product portfolio      
        (working days)                
                     
Network joints remade, replaced or sealed 132,000   tick       March 2008   March 2007   Improvement      
 
 
Network blackspots upgraded 5,000   tick   Business order provision   2.9   4.8   40%   tick  
 
 
Defective telephone poles removed/replaced 24,500   tick   Consumer order provision   3.9   8.4   54%   tick  
 
 
Overhead wires renewed/upgraded 29,000   tick   Business fault repair   0.6   1.3   54%   tick  
 
 
Targeted improvements to local networks 23,000   tick   Consumer fault repair   0.9   1.6   44%   tick  
 
 
Overall activity level in exchanges rose by 22%   tick                    
                     
Exchanges prepared for 21CN at 31 March 2008 1,600   tick                    
                     
 

Equivalence Management Platform (EMP)
The EMP provides a single interface for communications providers to buy products from Openreach. This is a major change from the previous approach under which each product was provided separately.
   The creation of the EMP is a major achievement: the largest IT capability of its kind in the telecommunications industry. The EMP underpins all Openreach’s interactions with communications providers, and has the capacity to process up to 100,000 orders a day and carry out up to 60,000 line checks an hour. All customers buying LLU now do so using the EMP. As a result, in February 2008, Openreach was able to retire the legacy LLU provisioning system, saving associated running costs.

Delivering on the Undertakings
During 2008, Openreach delivered a number of the Undertakings made to Ofcom, including the launch of wholesale line rental WLR3 analogue product on 30 June 2007. This provides communications providers with all the information they need to book and verify WLR3 orders in real time, 24/7, and with no limit on order volumes. Openreach also delivered equivalence of input for WLR digital services ISDN2 and ISDN30 in 2008.

Openreach products
Wholesale Line Rental
WLR, one of the largest transformations of the UK’s telecommunications industry, enables communications providers to offer telephony services with their own brand and pricing structure over BT’s network.
   At 31 March 2008, Openreach was providing over 22 million WLR lines to BT lines of business and just under 4.7 million to other communications providers. Of the lines provided to other communications providers, 3.8 million were WLR analogue lines (up 9% on 2007) and 0.9 million were WLR digital lines (up 31% on 2007).

Local Loop Unbundling
LLU enables communications providers to use the lines connecting BT exchanges to end users’ premises and to install their own equipment in those exchanges.
     There are two types of unbundled line:

green arrow a fully unbundled line which gives other communications providers the exclusive use of the copper line; and
   
green arrow a shared access line, which only gives other communications providers the use of the high-frequency channel used for broadband – the line will also be used by the customer’s fixed-line voice provider.

At 31 March 2008, there were 12.7 million unbundled lines in the UK, up nearly 20% on the previous year. Of these, 8.4 million were for BT lines of business, and 4.3 million were for non-BT communications providers. More than 20 communications providers were providing unbundled services from over 1,850 local exchanges and Openreach was fulfilling more than 69,000 LLU orders a week.
     Although the broadband market in the UK continues to grow along with continued exchange unbundling, this process slowed in 2008 as a result of market consolidation. Communications providers are increasingly focused on improving customer retention and acquisition by offering packages incorporating a selection of broadband, voice, TV and mobile services.

Ethernet
Openreach continues to develop a comprehensive portfolio of Ethernet products to support backhaul and access services for a growing number of other communications providers.
     One of the most exciting upcoming developments is Openreach’s new backhaul product, Ethernet Backhaul Direct. This product has been designed to meet the increasing demand for high bandwidth backhaul capability from customers wishing to connect their local access circuits back to their core networks. It supports broadband applications such as video on demand, which is now driving an increase in internet traffic. Additionally, by realising the cost efficiencies of 21CN, Openreach is able to offer a new, improved pricing structure for this service.
     Openreach has also launched three new Ethernet products: Street Access, Broadcast Access and CCTV Access, which give communications providers opportunities to move into new markets. Additionally, Openreach’s review of Ethernet circuit resilience pricing lowered the price and extended the availability of this option. Rather than a premium option limited to a few products, Ethernet resilience is now a viable and cost-effective option for enhancing service security.

Deploying fibre to the premises
In June 2007, Openreach completed an initial consultation with communications providers about the deployment of high-capacity fibre optic cable to premises and the delivery of wholesale services over these networks to greenfield sites. From August 2008, as part of an initial trial, Openreach will deploy fibre optic cable, instead of copper, to homes on a new 1,000 acre site at Ebbsfleet Valley in Kent. Around 10,000 homes will be built on the site, incorporated in 1.5 million square metres of retail, leisure and community facilities.
     At this site, Openreach will offer the communications industry a wholesale fibre-based broadband product, facilitating competition at a retail level. The service will be capable of supporting speeds of up to 100Mb – the fastest headline speed available to residential customers in the UK. This will make possible a range of applications from HDTV gaming to near-instant music downloads.

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