BT cutting wholesale price - but will it help rural areas?
Industry experts (yeah, those guys) have branded Ofcom's plans to cut the amount BT Wholesale can charge for access to rural broadband exchanges have been lambasted for being largely ineffectual.
Basically, Ofcom have said that they would force BT's hand in reducing the prices for 8Mbits/sec ADSL packages by 12% in exchanges where it was the sole provider.
“In rural areas where there’s limited choice other than going through BT equipment, companies like TalkTalk or Sky charge significantly more than for people on their own networks, where broadband is often free,” says Michael Phillips, product director at Broadbandchoices.co.uk, talking to PC Pro.
Unlike other providers, BT Retail's consumer broadband products have been priced the same in rural areas as those in urban dwellings.
“It’s pretty optimistic to think that this will have the effects that Ofcom hopes for - the reality is that a 12% reduction in prices will have limited impact.”
Ofcom say that they believe that, in imposing reduced prices for the 8Mbits/sec services, but not for 24Mbits/sec ADSL 2+ or BT's fibre, it would persuade BT to upgrade rural exchanges to faster broadband.
It remains to be seen whether the 12% reduction would be passed on to consumers or simply reinvested. BT say that most ISPs charge more in rural areas despite being charged the same price as BT Retail for the wholesale broadband packages.
"The impact on BT Wholesale will be non-material,” a spokesperson for BT said. "Unlike many other providers, despite the higher costs involved, BT Retail's consumer broadband products have always been priced the same in rural areas as in urban areas. This ruling is therefore of more relevance to those ISPs who currently charge a supplement in rural areas."
Meanwhile, those in rural areas can't read this and are still sat on their porches making butter and wondering what the hell the talking box is going on about when it says 'website'.