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By editorial@silicon.com, 29 June 2001 18:15

NEWS DSL provider OnCue has been forced into liquidation, blaming BT for its woes. The company revealed exclusively to silicon.com earlier this week that it had been having trouble making ends meet, pointing the finger at BT. However, the company denied 'categorically' that it had lost the support of its investors, which include Madison Dearborn Partners, Soros Private Equity and TD Capital. But its fate was sealed this week when one of its major investors did indeed pull out. Mark Ballet, CEO of OnCue Telecommunications, explained that the company had suffered because BT had hindered its attempts to place DSL equipment into local exchanges. This makes it difficult to bring as many of its customers online as required to make it a viable business. While waiting to bring its own service online, OnCue had been reselling BT's DSL service, which it claimed was of an unacceptably low standard. "If you are going to be able to build a business, you need to be able to predict the future," said Ballet. "The UK is currently lying in 28th place in the unbundling of the local loops, and our investors were not confident that this was going to improve." He pointed out that despite its requirement to open up the local loops it had only so far opened up 109 out of millions. He also noted that a year ago there had been 30 independent companies interested in DSL services in the UK now the number had been reduced to five "at most". The company will retain about 30 of its 165 staff, and continue to provide services to its customers. The liquidator, PWC, was looking for another provider to take up the service. "Unfortunately it could be BT," Ballet added. A spokesman for BT admitted that it was discussing with PWC an offer for continuation of service. But he denied that BT had done anything to hinder OnCue's business. "We have delivered everything that they ordered from us on time or ahead of time. We have given them access to seven exchanges and intended to enable 23 more exchanges today," claimed the spokesman. The move is a damning indictment of investor confidence in the UK DSL market as a whole. Andy Favel