Ofcom has told BT it must significantly reduce the wholesale prices it charges other broadband providers to use its network in less populated rural areas.
Ofcom believes a cut in the wholesale price will increase competition in broadband services and force the cost to consumers down.
In a review it found that there was effective competition in almost 80% of the UK. However in areas where BT is the only provider of wholesale broadband services, often less populated rural areas, it decided it should have to reduce its charge.
The changes will come into effect in August and only apply to BT’s up to 8Mbps services.
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The telecoms regulator believes this will translate into lower prices for customers, benefiting around three million homes and businesses.
Areas should include parts of Scotland, Wales and Northern Ireland as well as the South West of England, Norfolk, Yorkshire and Cumbria.
At the moment if you live in an urban area, you’re much more likely to have a wider choice of fast broadband services – read more about broadband availability and the digital divide.
Ofcom expects these changes to impact on broadband speed for those in rural areas, too. If the wholesale costs are reduced for broadband providers, then they should be able to buy more capacity for their customers without increasing their costs.
It also hopes BT will invest further in high-speed services in rural areas as the wholesale price cut does not apply to its roll-out of fibre-based broadband.
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