Ofcom Pushes BT to Make Rural Broadband Cheaper
Published: 22 July 2011 By MoneyHighStreet Staff Leave a Comment
Millions of rural internet users to benefit as Ofcom instructs BT to cut wholesale prices for broadband in the countryside.
Internet access has become an essential part of modern life, but rural residents have been suffering from poor service and higher prices – slowing down the pace of adoption and keeping many from experiencing the benefits of the internet age.
Now telecommunications watchdog Ofcom is aiming to change the status quo and increase competition – it’s instructing BT to cut its annual wholesale prices by 12% below inflation until 2014. This will lower the costs for companies who use BT’s network to supply internet connections to remote parts of the countryside.
Rural internet users currently pay up to £15 per month more than their urban counterparts for their service and could now begin to pay less – assuming providers pass on the savings to customers.
Ofcom has also designed the move to break the monopoly BT currently holds in certain areas by tempting new providers to enter markets where wholesale prices were formerly a barrier to entry.
BT still remains the only internet provider in nearly two thirds of its 5,500 exchanges, which serve 12% of the UK population.
It is estimated that around 3 million homes could benefit from the price reductions, with most of them in Wales, Scotland and Northern Ireland. Other areas that will benefit include Yorkshire, Northumberland, Cumbria, Norfolk and the South West of England.
The wholesale cut will not affect areas where BT has upgraded its network to offer faster speeds – an incentive by Ofcom to encourage the telecoms group to continue investing in its network.
Moneyhighstreet comments: “We welcome Ofcom’s move and would encourage as many people as possible to get online and take advantage of the many offers and services that can help them save money.
“While BT’s wholesale price cuts will happen, it remains to be seen which companies will pass on the savings to customers, how much of these savings they’ll pass on and when this will happen.
“If you live in a rural area, check with your provider or compare broadband prices online to find out which companies will now offer the best deal.”