Ofcom proposes cuts to wholesale broadband charges

The price BT is allowed to charge for its wholesale broadband is set to be slashed by Ofcom, leading to savings for the consumer.

BT today proposed new charge controls on BT’s Openreach products, which it sells to smaller ISPs so they can offer broadband telephone lines over the dominant network.

If the plans go through, the current charge of £84.26 for fully unbundled lines – which enable providers to install their own equipment for telephone and broadband services in BT’s exchanges – could fall by up to 6% every year between April 2014 and March 2017.

Shared unbundled lines – ISPs using their own equipment for broadband but BT’s voice network – will see the £9.75 annual charge fall between 8% and 12% every year and wholesale line rental – where providers use BT’s voice network to offer their own phone service – will drop from £93.27 annually by between 2% and 8% over the three year period.

Ofcom hopes these savings will then lead to cheaper deals for consumers buying services from providers using BT’s wholesale network.

“These controls would reduce wholesale charges that could be expected to lead to real-terms price reductions for consumers, as communications providers pass on savings to their landline and broadband customers,” read a statement from the regulator.

The changes should not come as a surprise to BT. The prices have always been regulated by Ofcom due to the significant market power held by the telecoms giant across the UK and last week the regulator published its fixed access market review showing this dominance was still apparent.

This review also made proposals around cutting the minimum contract ISPs have to sign up to in order to get virtual unbundled local access (Vula) from one year to one month and to slash the charge levied by BT to ISPs when they change providers.

Ofcom liberalises 2G and 3G spectrum for 4G

Mobile operators in the UK have been granted permission by Ofcom to repurpose their 2G and 3G spectrum, enabling them to use the frequencies for 4G services.

Previous regulations said Vodafone, O2 and 3 were only able to use their existing allocation for the slower mobile broadband connections and would have apply to the telecoms regulator to change it.

However, following a two month consultation earlier this year, Ofcom has now ruled mobile licences in the 900MHz, 1800MHz and 2100MHz bands could be re-used for LTE and WiMAX solutions – otherwise known as 4G.

“The decision allows mobile operators to increase mobile broadband speeds in future by re-using their 2G and 3G spectrum for 4G, and to plan and implement moves to 4G technology in these bands without having to submit future regulatory applications,” read a statement from the regulator.

“The decision also meets Ofcom’s objective to liberalise mobile spectrum for use with all currently-available technologies.”

Following the consultation, O2 and Vodafone have also been granted their request for an increase in the maximum power allowed to their 900MHz base stations, which it hopes will boost its 3G and 4G technologies.

Currently, EE is the only operator offering 4G services in the UK after a ruling by Ofcom last year to allow the company to repurpose its 1800MHz spectrum for the faster service. It was made to sell off a portion of its allocation – which was bought by 3 – but was given a year to clear it, meaning the buyer was still unable to launch 4G services until late 2013.

The other operators were forced to wait for Ofcom’s spectrum auction in February to get their hands on freed-up spectrum from the digital television switchover.

Vodafone, O2 and 3 are now expected to launch their 4G services this summer. BT also won a portion of the 4G spectrum but has said it will use it as part of its routers for wireless connections, rather than as a springboard to enter the mobile market.