Telecoms giant, British Telecom, today announced that it is slashing the current broadband access price for rival broadband providers by 70%.
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 comes under increased scrutiny from Ofcom. Today Ofcom announced that the number of proposals to increase the competition amongst broadband providers is underway.
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 LLU products are expected to be available in 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.”
He added: 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.
A spokeswoman told the BBC: “The move won’t immediately affect broadband customers” as it was a reduction of wholesale prices.
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