Ofcom has put forward proposals that would cut the wholesale price that Openreach can charge telecoms companies for its superfast broadband service.
The regulator says it intends to target wholesale price cuts for superfast broadband services to safeguard consumers from high prices. The superfast broadband service offered by BT’s network division offers speeds of up to 40Mbps, considered by consumers to be the most important service.
In forcing BT to reduce the price it charges at wholesale, Ofcom has made it clear it expects any savings to be passed on to consumers.
The new rules would also include stricter requirements on Openreach to repair faults and install new broadband lines more quickly.
Jonathan Oxley, Ofcom’s Competition Group Director, said: “Our plans are designed to encourage long-term investment in future ultrafast, full-fibre networks, while promoting competition and protecting consumers from high prices.
BT is required by Ofcom to allow competing broadband companies to use its network to sell broadband services to people and businesses.
Kester Mann, Principal Analyst, Operators at CCS Insight said the announcement reinforces the regulator’s determination to maintain a competitive UK retail broadband market and stimulate further investment. “The news is likely to be welcomed by Openreach customers such as Sky, which have long campaigned for better access and end consumers, which could see a reduction in their bills.”
Previously a willingness of people to consider a cheaper, more standard broadband has constrained BT’s ability to raise prices. But higher speeds and the greater need for connectivity has the potential to reduce its impact.
Ofcom intends to reduce Openreach’s charges for its ‘40/10’ Mbit/s broadband package, with the price falling from today’s level of £88.80 per year to £52.77 in 2020/21.
