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Ofcom to cut Openreach prices up to 9% in real terms

Ofcom proposes to impose real cuts of up to 9% on the wholesale price of a range of BT Openreach's products.

Ofcom proposes to impose real cuts of up to 9% on the wholesale price of a range of BT Openreach's products.

A consultation published on Thursday proposed the following cuts:

Product Current price pa Retail price index less
Fully unbundled line £89.10 -1.2% to -4.2%
Shared unbundled line £15.04 -11.6% to -14.6%
Wholesale line rental £103.68 -3.1% to -6.1%

Note: RPI is presently 5.5%

These products cover areas where Ofcom has found that Openreach has significant market power and therefore must accept price regulation. This consultation covers wholesale charges for BT's copper-based telephone and broadband services delivered, local loop unbundling (LLU) and wholesale line rental (WLR).

LLU allows communications providers to install their equipment in Openreach's telephone exchanges to provide broadband and telephone services to their customers; and WLR uses lines and equipment rented from Openreach.

Ofcom said the number of "unbundled" lines has increased from 123,000 in September 2005 to 7.59 million today, and there are 6.14 million WLR connections in the UK.

According to ITU figures, there were 32.1 million fixed line phones in the UK in 2009.

Ofcom aims to publish a statement in autumn 2011.

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