Ofcom outlines new price controls for fixed line wholesale services

21 May 2014

UK telecoms regulator Ofcom has published draft controls on the prices that Openreach, the network arm of fixed line incumbent BT, can charge other telecoms providers for some of its standard wholesale broadband and fixed telephony services. According to a press release issued by the watchdog, the charge controls make reference to the consumer price index (CPI) measure of inflation, and it claims this approach will incentivise Openreach to become more efficient.

With the price controls to come into effect from 1 July 2014, and remain valid until 31 March 2017, they cover wholesale charges for both telephone and standard broadband services delivered to homes and businesses over Openreach’s copper network. As per the changes, a ‘shared unbundled’ line to a property, currently priced at GBP9.89 (USD16.5) per year, will be capped at GBP5.54 from 1 July, following which it will be reduced in real terms by CPI -33.4% each year from March 2015 to 2017. Meanwhile, the maximum charge for a ‘fully unbundled’ line to a property will rise slightly from GBP83.92 to GBP86.10 from 1 July, and then by CPI +0.3% each year from March 2015 to 2017. Finally, wholesale line rental, which currently costs GBP93.32 per year, will be reduced to GBP91.04 from 1 July, before being reduced in real terms by CPI -3.0% each year from March 2015 to 2017.

Ofcom also confirmed that it will not, for the time being, impose wholesale price controls on Openreach fibre-optic access services.

United Kingdom, BT Group, Openreach (A BT Group business), Ofcom,

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