Countryside set for cheaper internet access
Wednesday 20 July 2011
Millions of people are set to get cheaper internet access after BT was told today to slash its wholesale charges to rural areas.
Ofcom, the UK telecoms regulator, has instructed BT to cut annual prices by 12% below inflation for the next three years for firms that use its network to supply remote rural locations.
Up to three million homes and businesses will benefit from the reduction, Ofcom said, especially those located in the hard-to-access parts of Scotland, Wales and Northern Ireland, the South West, Yorkshire, Northumberland and Cumbria.
The reduction does not include connection, which reduces the effective price cut to about 11%, Ofcom said.
Higher costs of delivery mean customers in remote areas pay more than those in the cities and towns, but the regulator wants the price cut to encourage both internet providers and BT to invest more in upgrading their systems.
This should result in lower prices and also faster access speeds for country areas, Ofcom added, while also encouraging more providers to install their own networks to compete with BT's wholesale business.
The regulator says 78% of broadband customers are in densely-populated and urban areas, which have effective competition and get a good service, but deals are still limited for the population outside of these areas.
BT said nearly two-thirds of its 5,500 telecoms exchanges serve the remote area market, but they account for only 12% of customers.
It added Ofcom's decision would have a "non-material" impact on BT Wholesale while retail arm BT Retail does not charge any more for supplying broadband in remote areas.
"Unlike many other providers, despite the higher costs involved, BT Retail's consumer broadband products have always been priced the same in rural areas as in urban areas. This ruling is therefore of more relevance to those ISPs who currently charge a supplement in rural areas," it added.
Ofcom flagged its intention to impose the price cuts in January when it indicated the reductions would be in a range of 10.75% to 14.75% below inflation.
- 1 VMAs 2015: Was Nicki Minaj and Miley Cyrus' awkward acceptance put-down real or staged?
- 3 Rules on 5p plastic bags likely to lead to arguments at the check-out
- 4 Chaos breaks out in courtroom as father attacks killer of three-year-old daughter
- 5 I like Corbyn, but let's face it: we don't need another white man at the head of a political party
VMAs 2015: Was Nicki Minaj and Miley Cyrus' awkward acceptance put-down real or staged?
Bank Holiday Monday opening times: Are Tesco, Asda and other supermarkets open today?
Rules on 5p plastic bags likely to lead to arguments at the check-out
The nine most warmongering countries in the world revealed
Isis releases graphic video showing four Shia 'spies' being burned alive in Anbar, Iraq
Climate change: 2015 will be the hottest year on record 'by a mile', experts say
'Women only' train carriages: Jeremy Corbyn unveils radical move to tackle public harassment
Jeremy Corbyn calls Osama bin Laden's killing a 'tragedy' - but was it taken out of context?
Black holes are a passage to another universe, says Stephen Hawking
Tony Blair attacks Jeremy Corbyn's 'Alice In Wonderland' politics
Theresa May says migrants should be banned from entering the UK unless they have jobs lined up
£35000 - £45000 per annum: Recruitment Genius: You will be working with a 8 st...
£8000 - £12000 per annum: Recruitment Genius: A unique opportunity has arisen ...
Negotiable: Recruitment Genius: An exceptional opportunity has arisen for a pa...
£18000 - £20000 per annum: Recruitment Genius: This provider of designer kitch...