UK Broadband Costs To Drop Following Ofcom Demand

UK telecoms regulator Ofcom has enabled a cut in prices for broadband and home phone lines by calling on BT to lower the fees Openreach can charge to operators.

BT Openreach is BT's wholesale arm which allows other broadband and home phone services to access its infrastructure for a fee.

Ofcom's move could mean that prices for gaining wholesale access to BT's phone and broadband lines could be reduced by as much as 10 per cent. The price cuts should benefit the customers of Sky and TalkTalk amongst others.

Ofcom has introduced two ways in which operators gain access to BT's infrastructure at lower rates. The first is Local Loop Unbundling, which will allow companies to place their own equipment in BT's exchanges. BT rivals who adopt this method will see a 1.2 to 4.2 per cent drop in the price charged by BT Openreach in a year.

Meanwhile, the Wholesale Line Rental scheme will let operators hire entire BT lines, with the rental price for these lines set to drop by 3.1 to 6.1 per cent per year.

“BT invests more than any other company in the UK's communications infrastructure, so it is critical that it is able to achieve a fair rate of return in order to continue its investment in copper and fibre-based services,” BT said in a statement.