BT Openreach told to cut broadband, phone line fees

BT Group will soon have to slash the prices it charges other internet service providers to offer broadband and phone services to UK households using its infrastructure, Ofcom has announced.

The media regulator has today proposed new wholesale charges for Openreach, BT's wholesale division, as part of efforts to stimulate price competition between providers.

Under the proposals, the price of an unbundled line - where third parties offer broadband and telephony services over BT's network - would fall from £91.50 per year to £87.41.

The cost of using a line just for broadband should also drop from £14.70 per year to £11.92, said Ofcom, while the cost of offering just a telephone line would fall from £103.68 per year to £98.81.

An Ofcom spokeswoman said: "We hope it will lead to cheaper broadband and landline prices for consumers."

Ofcom has notified the European Commission about the price changes. Should it get approval, the watchdog feels that the changes could come into force by April.

Openreach's prices for broadband and phone lines are regulated by Ofcom because the BT division "has been found to have significant market power in the delivery of these services".

TalkTalk, the UK's third-biggest broadband provider and a major customer of Openreach, welcomed the price changes.

A spokeswoman said: "We are pleased that the charges are being reduced - this reflects that BT's charges have been excessive in the past."

However, BT said that it needed to get a "fair" return on its investment in UK infrastructure, and suggested that it was considering an appeal against Ofcom's new pricing model.

In a statement, a BT spokesman said: "Whilst the prices are within the range outlined by Ofcom in November, we disagree with some of the underlying assumptions that they have used to determine these charge controls.

"Our primary concern throughout this process is to ensure that we are able to achieve a fair rate of return in order to continue our investment in the future of the UK's communications infrastructure."

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