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BT officially confirm wholesale broadband price cuts from May 2007

In the official BT announcement today, BT confirmed that it will reduce the price of its wholesale broadband products from 1 May, 2007.

The changes are as follows:

• BT Ipstream; 9 per cent reduction in monthly rental, from £8.40 per line per month to £7.63.
• Current rebate scheme covering the current 561 exchanges will now apply to 1,016 exchanges, with rebate to increase from £1.10 to £1.24. Net monthly rental price (i.e. rental less rebate) in these exchanges reduces from £7.30 to £6.39.
• BT Datastream; Current rebate of £1.15 for connections to the current 561 exchanges will be extended to the 1,016 designated exchanges. Net monthly rental price in these exchange reduces from £7.05 to £5.90.
• Connection charge for BT IPstream and BT Datastream products falls from £40 (ex VAT) to £34.86 (ex VAT) reflecting charges from Openreach.
• Cessation charge of £33.75 (ex VAT) to be introduced to again reflect input charges from Openreach. BT said “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.”

The proposed price cuts were first announced in November 2006, and the cuts from May 2007 are the first part of potential price cuts planned. BT says the reduced pricing will help ensure the further growth of a competitive market for broadband services now that more than half of all UK homes subscribe to broadband. It also said it aims to introduce speeds of up to 24 Mbps early next year.

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.”