Reduced Prices for Home Telecoms

Consumers may be on the brink of reduced home telephone and broadband services as Ofcom make moves to level the wholesale playing field. 

The telecoms regulator has revised the list of rates that Openreach, which manages BT's network, can charge other providers for using its services.  The proposals are the start of a consultation process that will end on 9 June.

With wholesale prices potentially falling by more than 10% per year, companies such as TalkTalk and Sky will see real benefits that could be passed on to consumers.  However, those that provide their own cable network, such as Virgin Media, will not experience those benefits.

Under Ofcom's proposals the prices of two of the ways that BT's rivals get access to its network will come down.  The first, called Local Loop Unbundling, allows telecoms firms to site their equipment in BT exchanges and take over lines to customers.  The second, is called Wholesale Line Rental, which involves telecoms firms simply renting lines from Openreach.

In response, BT released a statement which said: "BT invests more than any other company in the UK's communications infrastructure, so 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."

Any concerns BT have will be raised during the continued consultation process, the conclusions of which will be published in the autumn.  Any price changes will take affect later this year.