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BT confirms lower prices for wholesale broadband
Manoj Solanki, Monday November 13, 2006 - 1:59 PMService providers using BT wholesale broadband will see reductions in the BT rental charge and are planned to start from May 2007.
BT forecasts that 1.5 million LLU lines will be available by this time. Under the Telecommunications Strategic Review, BT is unable to lower the prices of its wholesale broadband offerings until the UK has 1.5 million LLU lines. The new prices are intended to provide a cost effective alternative to LLU services.
From May 2007, BT IPstream will cost £7.63 per line month, reduced by 9 percent. The rebate scheme that applies at 561 exchanges will be increased to cover 1,016 exchanges. There will be an increased rebate at these exchanges, bring the total end cost from £7.30 to £6.39.
The simpler Datastream product will also benefit. The existing rebate will be extended to the 1,016 designated exchanges, reducing the rental charge from £7.05 to £5.90 for connections in those areas. Further overall increases to the rebate are planned in January 2008.
BT Wholesale has also started to purchase the LLU product from its own Openreach division. It will effectively be charged for the provision and termination of a line from Openreach. BT plans to reflect these charges through connection and termination charges. As a result, the connection charge for BT IPstream and BT Datastream products will be reduced from £40 to £34.86. A termination charge of £33.75 is also set to be introduced, excluding migrations.
Cameron Rejali, BT Wholesale managing director said in the announcement:
“These pricing proposals will help our ISP customers develop their business plans and compete effectively in the broadband market.”
What does it mean for the end consumer?
On the new termination fee, they added: “We believe this standard termination fee, together with the connection fee, INCREASES the one-off cost of provisioning users from £40 to £68, an increase of £28, and represents a 70% increase. The reduction in rentals over a 12 month term amounts to just £10.92. Clearly, this standard termination fee will mean that prices will INCREASE for a proportion of users. Biscit would prefer to see ongoing rental prices falling by at least 20%, rather than the pitiful 9%, thereby ensuring cheaper ongoing rentals for customers who do not keep moving their service – as arguably once the service is connected and operating well, the ongoing costs should be lower.”
Trials of Wholesale Broadband Connect
BT Wholesale also confirmed it will be trialling its new 21CN next generation broadband service, dubbed Wholesale Broadband Connect, in selected exchanges across the UK from Summer 2007. The new service uses ADSL and ADSL2+ technology with planned speeds of up to 24 Mbit/s. BT Wholesale Broadband Connect is set to be available to about half the UK population from early 2008, with national coverage in line with the eventual rollout of 21CN.
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