TalkTalk, Virgin think BT's wholesale fiber prices are too high

BT (NYSE: BT) may be required to provide competitors with access to its copper and fiber-based networks, but competitive providers TalkTalk and Virgin Media believe that BT's wholesale fiber prices could jeopardize the UK government rural broadband plan.

In a letter sent to the government, TalkTalk and Virgin (Nasdaq: VMED) told the government that it would be more economical to build a separate network to BT's fiber ducts and aerial poles versus paying the incumbent operator's proposed wholesale access fees.

In the letter the two service providers said that "Urgent intervention is now needed to require BT to quickly revise the pricing of the proposed product," and that the government "risks a lack of vigorous competition and as a result, will fail to deliver the investment."

Last October, UK telecom regulator Ofcom mandated that BT open its fiber network to competitors, including including its underground cable ducts and telephone poles.  

BT itself has applied for government funding to bring its fiber-based broadband network to over 90 percent of UK premises. Previously, the government said it would provide about $1.3 billion to fund rural broadband connectivity projects.

Not surprisingly, BT is defending its pricing structure.

"Our proposed prices for duct access compare very well with European averages whilst our plans for pole access have been held up due to others delaying our trials," BT said in an e-mailed statement to Bloomberg.

For more:
- Bloomberg has this article

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