Don’t get tied up by LLU

1st October 2007

LLU service providers may seem to offer a great deal to businesses and consumers but resellers need to be careful how they select their suppliers and make sure that they read the small print, says Entanet’s COO, James Blessing.

There’s trouble looming around Local Loop Unbundling. It may take a while to arrive, but when it does, it’s likely to be pretty serious. It’s just possible that – if the industry sorts itself out, the trouble won’t be too bad. If it doesn’t, resellers who get involved in supplying LLU-based services may find they have to deal with some very unhappy customers and even find themselves out of pocket if those customers refuse to pay.

LLU aimed to open up competition and give consumers and businesses more choice and, to some degree, it has succeeded. However, whilst in the short term it almost certainly appears to be cheaper, it doesn’t necessarily represent better value for money over other ISP’s connectivity options.

For the consumer, LLU providers offer an attractive proposition – twin, triple or quad-play service at a great price, providing of course they sign up for the whole package. The trouble only comes when consumers later decide they want to switch back to their old supplier or to an alternative service provider. It’s only at this stage that they may find there is going to be a financial cost and a certain amount of inconvenience involved in moving. When this happens they’re not going to be best pleased, and it’ll be the resellers who have provided packages from LLU service providers who are likely to get it in the neck.

The LLU service providers could, if they really wanted to, nip the problem in the bud right away by explaining to resellers and customers exactly what sort of service they are getting and making it clear that moving away from the connectivity element of their service at the end of the minimum contract period is going to incur a cost.

The trouble is, doing this would make them less appealing at a time when they are desperate to get subscriber numbers moving so that they can start to recover the massive investment they have made. Right now, they are in the business of selling. Sowing seeds of doubt in a customer’s mind is not a great sales technique.

Now, you may be able to explain to customers that you were simply an agent for the service in the first place, but if they feel they were not made fully aware of the facts, they may refuse to pay for any switch-over. This may leave you to foot the LLU providers’ bill for changing service provider.

On the face of it you might think this sounds unfair and that LLU service providers should make these matters clearer to customers before they sign on the dotted line. They’re under no real obligation to do this at present though. Nor are they likely to be in the near future. Ofcom is monitoring the situation but no real action is imminent.

Earlier this year, the regulator did force ISPs to hand over broadband MAC codes through General Condition 22 of the General Authorisation Regime, but only after significant pressure from the public as complaints began to filter through. Today, Entanet is an active and enthusiastic member of the Migrations Programme Board, which advises on how processes should be changed to improve the customer experience. Even now, some ISPs don’t exactly race to get the MAC codes to customers when a migration is requested. Sometimes customers can be left without a service for a week or two as a result. That’s serious enough with broadband but apply that delay to a voice service and it could be very serious for businesses indeed.

The point about all of this is that resellers need to take responsibility when deciding who to partner with to provide voice and data services. Get it wrong and you could end up being caught between a rock and a hard place. Our recommendation would be that you pin down exactly what technology each service offering is using and ensure that there are very clear guidelines in place for each one before committing to selling them to your customers.

It is also important that you do point out to customers that there may be a cost and some degree of pain involved if they want to later switch back to their old service provider or try a different offering from an alternative supplier. That may seem like you are trying to put people off but as long as you have viable alternatives, you won’t lose the sale. Rather, you’ll win the respect and loyalty of your customers.