Ofcom and BT agree to price cuts pushing LLU

By Alun Williams

Posted on 23 Jun 2005 at 14:48

In the wake of today's regulatory announcements - see Ofcom forces access revolution at BT - BT Wholesale has announced a number of service charge changes.

BT Wholesale is cutting the rental price for its fully unbundled local loop product, in a bid to stimulate the local loop unbundling (LLU) market. Costs will fall from £105 per annum to £80, with effect from August 1, 2005.

Connection charges for the existing range of IPStream and Datastream ADSL products will also fall by £10 from September 1, 2005.

There will be stability for rental prices, however, for these products upon which third-party ISPs base their ADSL offerings. BT has agreed to a request from Ofcom that rental prices will not be cut until there are 1.5m unbundled lines in the UK. This is intended provide LLU operators and service providers with greater certainty for their investment plans.

Finally, Wholesale Line Rental operators (those who take responsibility for all voice services and provide a single bill for both line rental and calls) should benefit from greater margins for consumer line rental. BT will cut the monthly price other operators pay by 50 pence per line from 1 August 2005 before raising the amount its own retail arm charges (including VAT) by 50 pence later in the financial year. The price other operators pay for WLR will decrease further next year, promises BT, giving operators an overall margin increase of 10 per cent.