The price of home phone and broadband services could be set to come down after Ofcom, the telephones regulator, look to reduce the wholesale prices charged by BT Openreach.

Openreach are the wholesale division of BT and are responsible for charging other providers access to the BT network and the wholesale price charged to some broadband providers could be reduced by up to 10% per year which will benefit broadband providers such as Sky and TalkTalk.

Two of the ways in which rival broadband providers can get access to BTs network are both set to have the prices reduced, the first is through Local Loop Unbundling, this is where rival providers are able to install their own equipment into the local BT telephone exchange and take control of a customers line, these prices are set to drop by between 1.2% and 4.2% every year if Ofcom gets its way. In instances where the telephone line is shared the price is set to be reduced by 11.6%-14.6% each year with the current price charged being £89.10 per year.
With around 7.6 million unbundled lines in the UK this will mean that there is a lot of people who will benefit from these reductions.

The other way rival providers access BTs network is through Wholesale Line Rental (WLR) which is where the rival providers are simply renting the line from BT. There are around 6.1 million WLR line in the UK and Ofcom are looking to see yearly reductions in price of between 3.1%-6.1% with the price for this currently set at £103.68 per year.

A statement from BT had the following to say:

“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.
Upon initial review, we are encouraged by Ofcom’s recognition of this fact, but would question some of the underlying assumptions being used.“