BritishTelecom will this week try to face down accusations of intransigence over rivals' access to its local networks by striking a deal with struggling telecoms operator Redstone.

Under the deal, named Macronet, BT will allow Redstone access to its fibre-optic cable in order to connect its digital exchanges with each other and with its customer networks. Redstone claims that, because it will not have to dig up roads to lay cables, Macronet will cut the time involved in building a national network, and slash the cost from around £1 billion to £100 million.

BT described the deal as 'another way it could generate a commercial benefit from unbundling the local loop' (jargon for allowing rivals to install high-speed cables in its local exchange) and estimated that it could add up to £150m to revenue over five years.

But the deal is unlikely to please rivals such as Energis and Colt, which are also keen to offer cheap, high-speed internet access and services such as video on demand. Redstone puts its equipment in purpose-built boxes out side BT's premises. Energis and Colt want to get their own equipment into BT's exchanges, so Macronet will not help them.

Ben McClure, telecoms analyst with Old Mutual Securities, said: 'Redstone is not a very big competitor to BT. It could be that this is a way for BT to say they are co-operating with competitors, but picking the weakest one.'

Redstone has a pilot digital service in Portsmouth with some five small-business customers. It plans to extend this to five more cities, but lacks the finances.