BT broadband cuts put Bulldog on the verge

Bulldog Communications, the last surviving independent local loop operator, is on the verge of collapse as BT's broadband price cuts threaten to push its profit margins to zero.

Now that all DSL operators are slashing the retail price of broadband, Bulldog will need to cut its price to be competitive.

However, doing so could make Bulldog unprofitable as the cost of running its service within BT's unbundled loop will become prohibitively high.

Unlike other ADSL providers who can simply rent BT lines wholesale, Bulldog has the added expense of owning and running a part of the local loop in order to provide broadband connections.

Bulldog is demanding that telecoms regulator Oftel reduce the price of local loop unbundling (LLU) for operators or risk driving competition out of the UK DSL market.

Bulldog chairman and CEO Richard Greco told to silicon: "Since we are the only competitor left, we think the issue of reducing LLU prices is significant as BT has the monopoly.

"We're not Bulldog, we're underdog," Greco said. "We were planning to launch our service in May at £27 - just under BTopenworld's price - but the new price cuts in broadband mean we won't be in a position to compete."

Greco added: "The law says there should be LLU operators but the price we have to pay BT just to get into an exchange, without including all the itty-bitty costs and our equipment is £14 per line. That's the price we now need to aim our product at, and we can't do it."

Bulldog's original expenses to use an unbundled BT loop were based on the hostel building method that cost £70,000 in rent and equipment.

Last October, Oftel approved a co-mingling method of LLU use for other operators, which would cost from £25,000 for rent and equipment.

However, since its approval was passed, Oftel has failed to push BT into making co-mingled sites available.

Greco said: "We abandoned the hostel approach in favour of co-mingling, but how many co-mingling sites are there? Zero."