Kate Bulkley, Media Analyst.

Lattice and Thames to challenge BT with cables in sewers

By Kate Bulkley

The Independent

24 January 2002

A potential threat to a lucrative part of BT's business has emerged from a relatively unlikely place: London's sewers.

A 34m joint venture between Thames Water and the telecoms arm of Lattice is laying fibre optic cables along London's sewers at a rate of two kilometres a week. Once 80 kilometres have been fitted by this summer, the network will reach to within 50 metres of buildings that are among the biggest users of telecoms services in the London area. Roger Wilson, the chief executive of Urband, the joint venture, said: "There are limited choices in the final connection or last mile of service to the customer. The majority use BT, so most of the existing operators in London are showing interest in what we have to offer."

Urband has already signed two five-year contracts, one with Lattice's telecoms unit 186k, which completed a network connecting 20 UK cities in December. Urband says it has 60 requests pending for its last mile service and should sign several more contracts soon.

Urband plans to wholesale its fibre connections, so it sees its customers as the 160 alternative carriers, ISPs and telehotels that already provide connections to businesses in London. Except for Colt and Cable & Wireless, which have laid fibre into buildings, most of these alternative operators lease the last mile connection between their networks and the buildings of their customers from BT.

Camille Mendler, a fixed-telecoms analyst at the Yankee Group, said: "Urband have the potential to shake up BT's market presence in broadband connectivity. Urband doesn't have to dig up the roads, they can go up the sewer pipes and that means they can also provision a lot faster than the others and even in many cases faster than BT."

Using the sewers cuts the typical underground construction cost in half, to about 100 a kilometre. Mr Wilson said Urband is talking to potential partners that could help it provide sophisticated "managed" telecoms services, as well as the possibility of partnering with other water companies.

 

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