Ofcom today said British telecom operator BT must maintain a sufficient margin between its wholesale and retail superfast broadband charges to allow other providers profitably to match its prices.
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Notifying new measures to promote competition and investment in the superfast broadband market, Ofcom said the new pricing rule would preserve BT’s current flexibility to set its wholesale fiber prices, which in turn provides an incentive for future investment by the company in its fiber network.
At the same time, the rule would mean BT could not set prices in such a way that might prevent other telecom operators from competing profitably for superfast broadband customers.
After review by the European Commission, Ofcom expects to publish a final statement in February 2015.
What Ofcom wants from BT
This is a draft statement, which is being notified to the European Commission for comments, is aimed at ensuring that there is effective retail competition in superfast broadband to benefit consumers.
Communication providers have access to BT’s superfast broadband network through a wholesale product called Virtual Unbundled Local Access.
Ofcom said: “We are concerned that BT could distort the development of competition in superfast broadband by setting an insufficient margin between its wholesale VULA and retail superfast broadband prices.
“Our approach is designed to ensure that other communication providers have sufficient margin to be able to compete with BT in the provision of superfast broadband packages to consumers. It continues to provide BT with pricing flexibility for VULA that preserves its investment incentives in relation to superfast broadband,” Ofcom said.
Baburajan K
editor@telecomlead.com
