local loop unbundling (LLU)

by Oftel

The local loop is the part of the telecom network closest to a consumer's premises. It consists of a pair of copper wires that run from the customer's site to the local telephone exchange.

What is unbundling?

With 6500 local exchanges and millions of consumers, BT operates the majority of the UK's local loops. The process of "unbundling" the local loop will allow rival telecoms companies to put their own equipment onto the end of a consumer's local loop to offer services in competition to BT.

Why is it important?

Local loop unbundling means that small businesses and other consumers will have a greater choice over the provision of their telecoms services. In particular, many telcos want to offer consumers Digital Subscriber Line (DSL) services that promise to increase the speed of Internet access by a factor of ten.

What is DSL?

Traditional use of the copper local loop only utilises a portion of the capacity available. By using new technology that makes use of this spare capacity, a copper loop upgraded with DSL modems at both ends can send and receive data at a much faster rate than normal modem or even ISDN services. DSL can run at up to 2Mbit/s, this compares with ISDN running at 128Kbit/s and a normal modem at only 56Kbit/s. As DSL uses a different part of the spectrum on a copper wire, users will still be able to make and receive their normal telephone services such as voice and fax calls.

There are different types of DSL technology although the version many consumers will have heard about is ADSL, or Asymmetric DSL. ADSL is regarded as a more efficient use of resources because it devotes more bandwidth to users downloading information than to the uploading process. This reflects the typical usage pattern of most Internet users.

How will it help small businesses?

DSL services will offer all consumers access to high-speed Internet connections. Small business users in particular will welcome this, as in the past they may have been unable to afford the cost of more traditional high speed access methods, such as leased lines.

For example, a 2Mbit/s leased line will usually cost over GBP1000 per month. A DSL service running at 2Mbit/s can cost as little as GBP160 per month. The more basic DSL services (500k) are available now for as little as GBP20 per month (prices not including VAT).

Are there any drawbacks?

The principal limitation with DSL technology is that it degrades the further away you go from a local exchange. With current technology, the service can only reach to a distance of around 3.5km from the exchange.

When will I start benefiting?

Local loop unbundling is an on-going process and services began rolling out in 2001.

Check out the TelecomsAdvice information sheet on broadband connectivity and services for links to websites that let you check which services are available in your area.

Reviewed January 2011

last updated : 21/01/2011

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