BT told to cut internet price

MILLIONS of superfast broadband customers are set to see their bills slashed under plans by the UK telecoms regulator.

Ofcom is proposing to cut the wholesale price that BT’s network arm, Openreach, can charge operators such as TalkTalk and Sky for connections with download speeds of up to 40 megabits per second.

It intends to cut the price for an individual package from today’s £88.80 per year to £52.77 in 2021, adding: “We would expect much of this reduction to be passed through by retail providers to their customers, resulting in lower bills.”

Ofcom is also planning new rules for Openreach to fix and install lines more quickly.

Ofcom’s Jonathan Oxley said: “Our plans are designed to encourage long-term investment in future ultrafast, fullfibre networks, while promoting competition and protecting consumers from high prices.

“People need reliable phone and broadband services more than ever. We’re making sure the market is delivering the best possible services for homes and business across the UK.”

Ofcom is not proposing to cap Openreach’s wholesale charges for its higher-speed packages including its planned new G.Fast network, but the regulator believes the move will provide an incentive for BT’s rivals to invest in their own ultrafast networks.

Alternative fibre network provider, CityFibre, called the review “a major step forward” in providing incentives for rivals to compete with BT. But Openreach, which is being legally separated from BT, headed by chief executive Gavin Patterson, pictured, said the proposals did not appear to incentivise more investment in full-fibre networks.

It added: “The UK needs a regulatory framework that encourages investment and rewards risk. Building digital infrastructure is very expensive with long payback periods and we won’t recover our more than £3billion investment in fibre until after this charge control period. “We want to invest in more ‘full fibre’ infrastructure, and we’ll be consulting to develop new business models and support to achieve that.

“We support the ambition of higher service targets and we want to work closely with the rest of the industry to make sure these are the right measures and that they’re achievable.”