BT rejects local loop bid

BT has rejected an offer made by US consortium Earth Lease led by US asset finance company Babcock & Brown to purchase its local loop network. The struggling telecom giant confirmed that it had been approached by Earth Lease, but had refused its £8 billion offer without publicly disclosing its reasons.30 Jul 2001

The local loop connects telecom customers to the telephone network via copper and fibre lines. The operation of the local loop has come under attack from the UK Office of Telecommunications (OFTEL) because BT holds a monopoly over it. The Earth Lease bid would have enabled competing telephone and cable operators to lease the lines for a fixed fee. It would also have improved internet access for consumers in the UK as the consortium proposed to invest £500 million in high speed broadband developments.

BT has not given any reasons for its decision to refuse the offer which could have eased its debt, currently standing at about £16.5 million.

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