Slash UK broadband costs, says watchdog
BROADBAND access prices in Britain are still too high and need to be cut further to bring the country into line with other nations, according to Ofcom, Britain’s media and telecoms regulator.
The decision will again put pressure on dominant fixed-line provider BT Group, which essentially sets the market rate for broadband access by charging rival telecom companies and internet service providers (ISPs) a wholesale rate for access to its local exchanges.
Facing pressure from competitors and Ofcom, BT announced in May that it would cut by up to 70 per cent the wholesale prices it charges third parties to access its local loop - the last mile of copper wire connections linking households and businesses to telephone exchanges.
Rivals have long said BT’s wholesale broadband rates are too high and are hampering competition.
Earlier this week Wanadoo, formerly Freeserve, cut the price of its one megabit broadband package to £17.99 a month, undercutting rivals by about 40 per cent.
That was quickly followed by recently floated PulseNet with a similar package for £14.99. BT charges £29.99 for the same speed.
Ofcom said BT’s phased 70 per cent price cut for its "shared local loop unbundling" product, where it sells capacity on its own telecom equipment to rivals, matched its own new pricing recommendation.
But it recommended that BT cut the annual rental rate by a further six per cent to £12.64.
Ofcom said BT had the most room to lower rates to "fully unbundled access", for rivals to install their own equipment in BT’s exchanges. BT has proposed cutting these rates by 15 per cent, whereas Ofcom has suggested a 42 per cent cut.
An Ofcom spokesman said: "We believe local loop unbundling offers the greatest potential for competition and price differentiation. That’s why we’ve made it a priority."
BT said: "We aspire to get closer to Ofcom’s pricing proposals."
<b>U think Telkom will be as ameanable as BT? Goes to show you how far we are behind.</b>
<b><hr noshade size="1"></b><font size="2"><font color="red"><b>You can take Telkom out of the Post Office but you can't take the Post Office out of Telkom.</b></font id="red"></font id="size2">