We note with interest the reported bids by various consortia for part or all of BT's fixed-line network. According to press reports, the Earthlease consortium has offered £8bn for BT's local loop (i.e. the copper wire connecting individual telephones to the local exchange), while a WestLB led consortium is reported to be ready to offer £18bn for the entire network. Note that each of these bids will be structured as asset purchases financed largely by debt. The plans are to provide wholesale access to the network to BT Retail and other telcos.
We try to assess the impact on the replacement cycle and network use, and hypothesise that these development are not likely, by themselves, to increase the current levels of replacement. Cameras and Multimedia Messaging Services look as though they may be an attractive combination, but we question whether the industry has yet managed to create true interoperability between phones for this type of function.