OFCOM ruling means cheaper prices for BT customers

Broadband and landline customers of BT are soon going to benefit from lower prices as Ofcom have recently initiated pricing controls on BT Openreach. The industry regulator first suggested that prices should be capped back in February and it has recently got approval from the European Commission over the caps. The changes can now be implemented, but it is likely that BT are going to appeal the decision by the EC.

A statement released from Ofcom read, “We want to introduce these price controls because they will offer additional protection to consumers. They are also going to give telecommunication providers such as BT the right incentives to continue investment in services and their networks.”

There is going to be no direct saving to the consumer but it is expected that the saving seen by the telecommunication companies are going to be passed on to their consumers. The wholesale price of the product from BT is going to be limited and this is going to lower the cost for other Internet service providers who are reselling connectivity from the company. This means that the customers of these resellers are going to receive more favourable deals eventually.

The new line rental cap at the wholesale level is set at £99, which is a reduction of five pounds on the previous figure. It is also expected that next year the regulator is going to cause this to drop yet again.

BT have raised an issue with the regulators saying that they are not happy with the way that cuts have been calculated. They say that the regulator have made the valuations incorrectly based on inflation models that they don’t agree with and cost savings they might not be able to achieve. BT have said that they are considering launching an appeal.