Broadband and home phone prices set to fall
Regulator Ofcom challenges BT to lower wholesale costs of line rental.
The price of broadband is likely to fall after regulator Ofcom set out new caps on the wholesale price that BT can charge for line rental.
BT’s Openreach division currently provides copper lines for a variety of phone and broadband providers.
It’s now capping the cost of a broadband and telephone line at £87.41, down from £91.50. The price of a broadband line will decrease from £14.70 to £11.92 and the price of a home phone line from £103.68 to £98.81.
It’s also proposing further inflation-linked decreases in 2013.
Under legislation, Ofcom has to submit its proposals to the European Commission for review.
If they’re approved, competitors such as Sky and TalkTalk are likely to pass the savings on in the form of lower broadband and home phone costs.
However, BT has indicated that it may appeal the Ofcom costings. A final decision is expected in early March.
Meanwhile, BT has announced that it will be able to offer 300 Megabits per second (Mbps) broadband from next year. It has committed to delivering superfast broadband to two-thirds of UK business premises by the end of 2014.
The Government defines superfast broadband as having an access speed of greater than 24Mbps.
If you want to look for a better broadband deal, you can compare broadband providers at our partner broadbandchoices' site here.
More: Broadband speeds still lagging behind advertised rates | Five broadband rip-offs
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People should understand that BT and BT Open Reach are different companies. They were forced (by Ofcom) to split in 2006. Personally I think it is unfair of ofcom to force openreach to both increase line speed (which costs money) and then to lower prices for a better product. Ofcom has also put restrictions on BT itself so that it isn't allowed to cut line rental / broadband prices below a certain amount. It seems unfair that one restriction is lifted so that other companies can offer faster speeds for less when BT is then forced to keep their prices high. I think that ofcom have met its obligations in ensuring that BT does not have a monopoly on the market and it should now reconsider all its restrictions. For one, BT open reach should be able to recoup the costs of improving the network before being forced to lower its prices. Otherwise we don't have a chance of persuading them to upgrade the network in the future.
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I moved my (broadband only) fixed line to primus in November as recommended by LoveMoney and am now paying £6.79 a month instead of £14.70. No noticeable deterioration of service so far although their operation is more simple and internet-based / self service bills etc. Of course BT charged me line rental for a couple of weeks after the cutover date but at least I'm now saving 70% each month. Primus also do Broadband but I haven't switched that to them yet.
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I still fail to understand how it is acceptable for BT to rent a line that is only used for broadband at £14.70 a month, total joke. Let's get it down to a £5/month for the line rental or better yet give everyone free access over a new government 4g network, that would seriously enhance our businesses competitiveness and populations knowledge levels.
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08 February 2012