AOL has announced it is setting up a new telecoms infrastructure in the UK to bring more competition and innovation to the local telephone network. AOL believes Ofcom's recent mandate on LLU bundled with the Strategic Review of Telecommunications has been key to give it a level playing field with BT.
AOL will be spending approximately £50m in the first phase in the first half of 2006 to reach up to 300 exchanges covering 20% of UK households. If this is successful, AOL is going to consider expanding up to 1,000 exchanges with an extra £70m investment required covering 50% of UK households. The funding for the project is coming from parent company Time Warner. Unbundled services will be "ADSL2+ compatible" to cope with broadband services in excess of 8 Mbps.