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February 7, 2012

Ofcom orders BT to reduce Openreach prices

May benefit customers of BT's rivals as they would pass on the reduced charges to them

By CBR Staff Writer

UK telecom regulator Ofcom has asked BT to bring down the prices that its wholesale network Openreach charges other companies for using their lines.

Ofcom has submitted its proposals to the European Commission, which if approved would cut BT’s broadband fee from £14.70 to £11.92 starting from April.

The cost of line rental for telephone providers will also then drop from the present £103 to £98. Ofcom is also said to be planning for further decreases next year.

These proposals are likely to benefit BT’s rivals including Sky and TalkTalk, who may reduce the prices for their customers.

But, BT is reportedly unhappy with Ofcom’s decision arguing that its calculations will impact its fair return of revenues, which is necessary for it to continue investing in the UK’s communication infrastructure.

A BT spokesman said whilst the prices are within the range outlined by Ofcom in November, BT disagrees with some of the underlying assumptions that they have used to determine these charge controls.

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