Ofcom Wants Openreach Cost Cut

BT Group will have to cut the prices it charges internet providers and others who sell on services using its lines, Ofcom says.

The telecoms regulator wants the cost for use of a broadband and phone line to drop from 91.50 per year to 87.41.

The cost of using a broadband line usually should moreover drop from 14.70 per year to 11.92, Ofcom said.

An Ofcom mouthpiece said: "We hope it will lead to cheaper broadband and landline prices for consumers."

This is the third time Ofcom has set the prices that Openreach, BT's indiscriminate division, charges other companies for using their lines.

The proposals have been submitted to the European Commission that has a month to criticism on the changes.

If approved, Ofcom expects the changes to advance in to force from April.

Ofcom regulates the prices charged by Openreach because, it says, the firm has a widespread location in the market.

The cost changes were welcomed by Talk Talk, a of the communications providers that uses Openreach lines.

A mouthpiece said: "We are gratified that the charges are being marked down - this reflects that BT's charges have been extreme in the past."

However, in a matter BT told the BBC: "We remonstrate with a few of the underlying assumptions that they have used to establish these assign controls.

"Our first regard via this routine is to make sure that you are able to accomplish a satisfactory rate of lapse to be able to go on the investment in the future of the UK's communications infrastructure.

"We will ponder all options existing to us, inclusive appealing, after Ofcom confirms its last decisions."

Ofcom mentioned that the cuts were formed in segment on an evaluation of the expenses Openreach incurred running the network of subterraneous ducts used to bring copper lines to properties.

Industry consultant Matt Howett, from telecommunications researcher firm Ovum, told the BBC that the proposals followed pressure from Europe to lower pricing.

"The European Commission has been really outspoken about perplexing to bring down the cost for substitute operators to access incumbents' networks," he said.

But he updated that BT could take its concerns with the draft cost reductions to Ofcom before anything was approved.

"Openreach will say the revisions will end it from being able to make a satisfactory lapse to be able to go on to deposit in its network."