Ofcom will seek to reduce BT’s Openreach charges so consumers could benefit less expensive broadband packages. This is good news for voip phones users who will also get to pay less for their internet connection service. Such small prices are meant to offer quality services that are affordable to all consumers, and also to act as a way to improve network investments. Ofcom is trying to discuss rental charges meant for a yearly wholesale, charges which will be made clear further in this year, and will be kept until March 2014.
The change in prices will try to affect the landline costs. People will want to change their landline package to a voip hardware one. BT will charge about ten per cent more on landline and consumers will definitely think of choosing voip. A wholesale price reduction would surely trigger the same effect on both home installed telephones and broadband services. Companies like TalkTalk or Sky could see better results but this won’t be the case for Virgin Media, a company which already has a cable network of its own.
Ofcom wishes to reduce costs to about 1.2% or even 4.2% per year when an operator takes ownership and control of the lines. The price of shared lines would go down more, to about 11.6 or 14.6% per year. Ofcom calculated that there are almost 8 million free lines in the UK.
Wholesale Line Rental implies only telephone line rentals from Openreach. These prices will also drop and will situate somewhere between 3.1 and 6.1% per year. Ofcom also calculated the widespread of WLR in the UK to about 6.14 million. The prices will be calculated according to the rate of inflation. This will mean that they are directly proportional with its increase.
Ofcom words concerning the matter: “Ofcom expects its proposed prices to lead to real term price reductions for consumers, as communications providers pass on savings to their landline and broadband customers.”
In response to Ofcom, BT has also made a statement which contained: “BT invests more than any other company in the UK’s communications infrastructure, so it is critical that it is able to achieve a fair rate of return in order to continue its investment in copper and fibre-based services.”
Ofcom’s results will be made clear this autumn, and the effects will be sure to stay until March 2014.