Leased line issue being ignored

Report says focus on DSL is a 'mistake'

Leased lines provide the best access technology for corporate users but are overpriced, and offer poor service quality and slow delivery times, according to a report by the Yankee Group.

The 'Leased Lines in Europe: Too little, Too Late?' report was commissioned by European operator Ebone. It claims that regulators have neglected leased lines, preferring to focus on technologies such as DSL, which are aimed at consumers and very small businesses.

"We believe this is a mistake," said the report. "Our research shows that large corporate users regard short-distance leased lines as vital, but believe they are too expensive and take too long to deliver."

European corporate customers suffer higher prices than companies in the US, where a 45Mbps circuit costs only £1135 a month. A slower 34Mbps circuit in Europe costs £2509 a month on average.

The price of local 2Mbps circuits has not fallen as quickly as international circuits, which have dropped 96 per cent from 1992 to 2000. The cost of local circuits fell 44 per cent in the same timeframe. And delivery times are lengthening, often to 12 weeks or more.

Yankee also attacked wholesale pricing, saying that it is often equal to retail pricing and leaves competitive operators with no possible profit margins.

The report urged regulators and governments to shift their focus to the corporate sector and act on the leased line issue if they want to ensure the success of ecommerce ventures requiring high bandwidth.