BT’s Cage Rattled over UK Wholesale Price Changes
June 1st, 2009Changes to the prices Ofcom sets for BT’s wholesale division Openreach haven’t gone down too well with the internet service provider. As of today, BT have been given the go ahead to charge £86.40 for each unbundled line (up from the previous £81.69).If a broadband provider shares a line with BT, it can charge £15.60 (unchanged from last year).
It looks as if BT was expecting a bit more leeway and now, there’s nothing that can be done until May 2010. It’s claiming the minimal increases means it will be making a loss on each connection. But Ofcom disagrees. Commenting on the decision, chief executive Ed Richards said: “These new prices will enable Openreach to earn a fair return whilst allowing continued strong consumer take-up of broadband and competitive prices.”
In response a spokesman for BT said: “Ofcom has taken a tentative step towards rebalancing the market but that step is insufficient and creates real disincentives for future investment. It was previously agreed that Openreach would be allowed to fully recover its costs and that is all we are asking for.”
According to news site, The Register, Ofcom was expected to tweak the wholesale price BT was granted to charge between £85 and £91 meaning it opted for a fairly low price hike in relation to what it could have agreed.
