Ofcom orders BT Openreach to cut charges for providers

Saturday, April 1st 2017

Ofcom, the telecoms regulator of UK, has told BT Openrerach to cut charges it puts on rivals such as Sky and TalkTalk. The watchdog said Openreach, which maintains the broadband network of UK, should charge £52.77 per year for a standard line into a household, from the present £88.80 per year, which carries a a download speed of 40Mbps and 10Mbps upload speed.

The regulator said it expected the costs savings of companies to be passed on to the customers, via lower bills. However, Openreach will maintain its prices for its lines with faster speeds. The new charges will be brought in during 2020—21 (for lines with 40Mbps download). The watchdog body hopes this will motivate competing firms to install their own superfast lines to compete with BT. Ofcom has recently also imposed tough targets on repairing of lines and new installation, to be followed by Openreach.

Chief executive of TalkTalk, Dido Harding, said she welcomed the price cuts, but said if consumers have to wait a year for lower bills, it would be frustrating. She pointed out regulating some products risks making a speed divide, where consumers choosing between fair price and higher speeds, will make a false choice. She claimed the best way to maximise uptake and investments in fibre infrastructure in future, is to lower prices for consumers on all superfast products. Competition group director at Ofcom, Jonathan Oxley, said their plans are to promote competition and protect consumers from high prices and to boost long-term investment in ultrafast, full-fibre networks in future.

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