Ofcom issues consultation on BT Openreach prices

Ofcom, the UK telecom regulator sets out the first of its consultations that will look into prices of the wholesale access telecoms services offered by BT Openreach to other telecom operators. The review of prices will include Home and business WLR and LLU  (SMPF/MPF) services.

It should be noted that, BT was reported to be achieving just less than 10% return for the investment it has made on its BT Openreach division. So, in this context, the consultation can hint small rise in wholesale prices of BT services, which in turn will lead to price increase in broadband services for the end users.

When BT’s subsidiary, Openreach was launched, Ofcom ensured that it could charge maximum charges for its main services. However, there was annual adjustment for inflation or other cost movements that were not included in the charges that BT Openreach can charge. Initially, Ofcom agreed to review the charges in future to make changes depending on these factors. The consultation issued by Ofcom is clearly an indication of this.

Statement from Ofcom:

The consultation will be in two stages. Today’s consultation sets out the considerations that Ofcom will take into account in determining any new charges. The second consultation - due later in the year - will set out more detail on the proposed new charges.