BT Wholesale has announced a 25% cut to its Wholesale Ethernet Etherway connection charge for a six month period to the end of July.
The move comes just days after regulator Ofcom proposed significant reductions in the prices BT is allowed to charge other providers as part of an attempt to roll-out fibre-optic broadband to rural parts of the country, and goes above and beyond Ofcom's suggested cut of 11% to 15%.
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BT's decision forms part of a wider round of tweaks to its Wholesale pricing strategy, including a 50% rental reduction on Standard Etherflow. BT says that this will increase the "cost efficiency, flexibility and versatility of this next generation product".
It has also pledged to reduce its first mile fault fix times, enhanced its online self-service portal for Wholesale customers and added new resilience and speed options.
Trefor Davies, CTO of comms provider and ISP Timico, suggested that the cuts may not have the effect Ofcom intended, however.
Writing on his blog, Davies pointed out: "ISPs buy bulk backhaul bandwidth from BTW. This is not specific to particular exchanges or locales. For example, Timico's bandwidth comes into two docklands locations from all our customers all over the country. We would not be able to say 'this customer gets more bandwidth because he is one of the lucky ones living in an area with reduced costs'."
Davies pointed out: "A reduction in bandwidth costs would be better. We may find that competition does drive down the cost to the end user a little in these cost reduced areas but there is also a fair chance that ISPs will just pocket the additional margin."