British telecom regulator Ofcom announced revolutionary measures to promote investment in new fibre networks and to protect customers from higher prices.
While announcing the innovative measures, Ofcom is also trying to encourage BT to enhance Capex in high-speed Internet networks Internet networks in the UK and enhance revenue streams.
“We are proposing to maintain our policy of pricing flexibility for Openreach’s fastest broadband products, including those based on BT’s own network investments in full-fibre and its new G.Fast technology,” said Ofcom in a statement on Friday.
Ofcom proposes to cut the wholesale price that Openreach can charge telecoms companies for its superfast broadband service with download speed of up to 40 Mbit/s.
The main benefit will be to residential customers, who can get broadband services at cheaper prices. Ofcom is expecting that the measure will promote competition in the superfast broadband service market, while companies will make investment for constructing their own fibre ultrafast networks to compete with Openreach.
Ofcom is suggesting new rules for Openreach to repair faults and install new broadband lines more quickly. If Openreach, an independent company and not part of BT, fail to meet the new targets, Ofcom will impose fines.
Jonathan Oxley, Ofcom’s Competition Group Director, said: “Our plans are designed to encourage long-term investment in future ultrafast, full-fibre networks, while promoting competition and protecting consumers from high prices.”
Ofcom wants to provide incentives to encourage investment in ultrafast networks. Ofcom said BT should allow competing broadband companies to use its network to sell broadband services to people and businesses.
Ofcom aims to reduce Openreach’s charges for its 40/10 Mbit/s broadband package, with the price falling from today’s level of £88.80 per year to £52.77 in 2020-21.
Ofcom said it is not proposing to cap Openreach’s wholesale charges for its higher-speed packages including G.Fast network, as the cap on the 40/10 Mbit/s package should be sufficient to protect competition and protect consumers from higher prices.
Regulating the price of the 40/10 Mbit/s package would help BT’s rivals to compete for customers. Ofcom proposals also provide an incentive for BT’s rivals to invest in their own ultrafast networks for the longer term.
