BT is failing in its attempts to unbundle the local loop, the network of copper wires connecting homes to the phone system, admitting today it has handed over only 163 residential lines to rival operators.

Last year BT agreed to telco watchdog Oftel's targets that 600 lines would be released by July 2001, but are now just over a quarter of the way there, having released 163 lines.

"BT has agreed that unbundled loops will be available at no less than 600 of its exchanges by July 1, assuming it receives suitable orders," said Anne Lambert director of operations at Oftel last November.

Patricia Hewitt, Secretary of State for Trade and Industry, also said there would be "widespread unbundling" by July this year, but it seems apparent BT has not reached its targets.

"Since January this year 5000 exchanges have been opened for possible take up, but we simply haven't had the demand," countered David Orr, spokesman at BT. "When this whole process started there was a market boom [and many operators came forward to show their interest] but now the whole sector is coming under pressure and companies simply can't find the funds needed."

The slow rollout limits competition, meaning consumers have little choice as to which provider they can use. But it's a serious issue that the problem may be as much the cost alternate operators face as BT's notorious reluctance.

"Unbundling increases competition, that's its purpose," said an Oftel spokesperson. "We have been working with BT, which has met all our targets, to push this forward but without demand there's little BT can do and that is unfortunate for the end user."

With blame being placed on the current market downturn, consumers will just have to sit and wait for things to pick up and only then will prices be forced down by competition.

"There has been some movement towards progress as we do have orders in the pipeline," said BT's Orr. "From our point of view we have met every deadline but we can't make companies take up our services."