BT today reiterated its commitment to a competitive market for broadband services in the UK and confirmed that it will reduce the price of its wholesale broadband products from 1 May, 2007. This is the first implementation of the proposed price reductions unveiled in November last year.
The reduced pricing will help ensure the further growth of a competitive market for broadband services when, for the first time, more than half of all UK homes subscribe to a broadband service. BT Wholesale already offers UK customers the highest stable speeds for broadband over the widest national footprint in the world and is aiming to introduce speeds of up to 24 Mbit/s early next year. These higher broadband speeds, together with the price reductions and BT Wholesale’s focus on delivering high quality of service levels to customers will enable UK service providers to compete effectively in the broadband market.
From 1 May, service providers using BT Wholesale’s most highly used product – BT IPstream – will benefit from a 9 per cent reduction in the monthly rental charge, with the price falling from £8.40 per line per month to £7.63.
There will also be further savings for service providers at high density exchanges, to reflect the lower cost of providing broadband in these areas. The current rebate scheme that covers 561 of these exchanges will now apply to a total of 1,016 exchanges. The level of this rebate is also set to increase from £1.10 to £1.24 from May 2007.
The increase in the rebate – combined with the lower rental price – will reduce the net monthly rental price (i.e. rental less rebate) in these exchanges from £7.30 to £6.39. This is a reduction of 12.5 per cent.
Cameron Rejali, managing director for products and strategy, BT Wholesale said: “The new pricing will deliver significant cost savings to our service provider customers and underlines BT’s commitment to maintaining a competitive broadband market. Service providers can also look forward to a nationwide service offering speeds of up to 24 Mbit/s – called Wholesale Broadband Connect – which will start to be made available early next year as part of BT’s 21CN roll out. We will shortly start preparing our exchanges to support the delivery of these higher broadband speeds. Combined with the price reductions announced today and our focus on quality of service, we believe that our plans for Wholesale Broadband Connect will allow our service provider customers to compete effectively in the broadband market.”
The revised rebate scheme will also apply to service providers using the BT Datastream product. The existing rebate of £1.15 for connections to the current 561 exchanges will be extended to the 1,016 designated exchanges. This will effectively reduce the monthly rental charge per end user from £7.05 to £5.90 in those areas from 1 May, 2007.
The connection charge for BT IPstream and BT Datastream products will also fall from £40 (ex VAT) to £34.86 (ex VAT) from 1 May, reflecting charges from Openreach and allowing service providers to benefit from reduced set up costs.
A cessation charge of £33.75 (ex VAT) will also be introduced from 1 May, to again reflect input charges from Openreach. The charge will not apply when a consumer wants to switch to another service provider where both service providers participate in the MAC process, or where there are bulk migrations to LLU. BT believes that this will further encourage participation in the MAC process, which will be beneficial to both the industry and consumers.