Ofcom proposes BT unbundling price cuts

BT may be forced to offer lower prices to competitors looking to access its telecoms services.


Ofcom has proposed reductions to what BT Openreach can charge other providers to access to its telecoms services.

This could lead to price cuts for customers, if other comms providers such as Sky and TalkTalk pass on savings, Ofcom said today.

Ofcom will consult on the changes until 9 June, but said it expected them to come into effect later this year and run until 31 March 2014.

The reductions relate to both Local Loop Unbundling (LLU) where other providers take control of BT's copper lines - and Wholesale Line Rental (WLR) where providers rent services from Openreach.

In cases where a line is fully ubundled, Ofcom wants to see the regulated wholesale price of today - 89.10 per year fall by between 1.2 per cent and 4.2 per cent each year until 2014.

Where unbundled lines are shared, the regulator proposed a fall of between 11.6 per cent and 14.6 per cent each year.

As for WLR reductions, Ofcom would like to see prices drop by between 3.1 per cent and 6.1 per cent every year.

"The proposed prices strike a balance between providing incentives to invest in networks and ensuring that broadband and landline prices are affordable for consumers," the regulator said.

In response to the Ofcom proposals, BT said it invests more than any other company in the UK's communications infrastructure.

"It is critical that it is able to achieve a fair rate of return in order to continue its investment in copper and fibre based services," a statement from the firm read.

"Upon initial review, we are encouraged by Ofcom's recognition of this fact, but would question some of the underlying assumptions being used. As a result, we will be raising such concerns with Ofcom during the consultation process."

Ofcom plans to publish a statement on the consultation's outcomes in the autumn.

There are around 7.59 million unbundled lines available for other providers to access today. Back in 2005, there were just 123,000.

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