BT Reveals Plans To Slash Broadband Price For Rivals
Telecoms giant BT has announced that it is slashing the price it charges rival internet service providers to use its local broadband exchanges by 70%, ahead of a wide-ranging investigation by Ofcom
The price cuts are for the local loop unbundling (LLU) products – the last mile of cooper wire connections linking households to telephone exchanges, which are used by rivals such as Telewest to provide its services.
The cost reduction comes at a time when BT is under increased scrutiny from media regulator Ofcom, which recently announced a number of proposals to increase the competition amongst broadband providers.
As BT has been forced to open up the lines to rival companies to increase competition, it says the move will benefit those companies who are willing to invest and innovate.
Chief executive, Ben Verwaayen, said: “We now have a far clearer idea of how Ofcom sees the market developing and we share their view that competition based at the infrastructure level will be good for everyone and for the UK in general.”
The new cut-price LLU products are expected to be available in around six months but price cuts will be made immediately so BT can ensure that there is demand which will give potential customers confidence.
Verwaayen said: “Our announcement marks a major move towards the telecommunications market of the future. BT has always argued that a market needs to develop in which those who are willing to invest and innovate can reap the rewards. This is a significant step in the that direction.”
Monthly rental prices will be slashed on 1 June from £4.42 to £2.26 per line and the connection fee will fall, from £117 to £83.33 – a 35% total cut. Prices will be cut by up to 70% when the full cost benefits of the re-scoped product are available says BT.
Research predicts that Britain will top the league of broadband-enabled G7 nations by the end of the year. Britain currently lags far behind other developed countries such as Japan in terms of ultra-high-speed access, but it is anticipated that it will score highly in terms of broadband availability, thanks to rapid take-up in recent months (see Britain On Track To Lead Broadband Nations).
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