Ofcom proposes that BT Openreach reduce its wholesale rates

UK wireline service consumers could see a lower monthly bill next year as a result of Ofcom's proposal to have BT Openreach (NYSE: BT) cut the wholesale prices it charges to competitive providers.

The regulator's proposal will affect two pieces of BT Openreach's business: charges for local loop unbundling (LLU), a service that allows service providers like TalkTalk to install their broadband equipment (DSLAMs) in a BT CO (central office), and Wholesale Line Rental (WLR) that allows competitive providers to rent BT lines to deliver phone services to consumers and businesses.

So what does this mean from a price perspective? A competitive provider that uses its own equipment to deliver service will be reduced 1.2 to 4.2 percent below inflation, while the prices of a rented line will be reduced 3.1 and 6.1 percent under inflation every year. The pricing controls for LLU and WLR services would run until the end of March 2014.

Ofcom said in a statement that it "expects these proposals to lead to real term price reductions for consumers, as communications providers pass on savings to their landline voice and broadband customers."

With the proposals on the table, Ofcom has launched a public consultation with plans to release official prices this upcoming fall.

For more:
- Reuters has this article

Related articles:
BT appoints Olivia Garfield as its new Openreach chief
BT names 6 winners of its FTTX broadband contest
BT plunks down another $1.5 billion on FTTX network
BT Wholesale reaches five million 21CN user mark

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