BT Says Wholesale Broadband Price Increase is Too Small
BT is not too happy with the change in price announced by Ofcom for BT’s wholesale division Openreach. BT has been allowed to charge £86.40 for its unbundled line, which earlier used to cost £81.69. If a broadband provider shares a line with BT, the charges would remain the same as last year i.e. £15.60.
BT had hoped to get a better price, but now it will have to wait until May 2010 for a more favourable revision. The company has commented on the change saying that it would be incurring a loss on each connection at this price. However, the chief executive of Ofcom, Ed Richards argues that the new prices will allow Openreach to make a reasonable amount of profit and at the same time, it would uphold the interests of the customers.
Replying to this a spokesman from BT commented that even though Ofcom has taken this measure to bring fairness and balance to the market, the price increase is not enough for the service provider to recover its costs and make profits. The lower increase in price is likely to put off future investments in this area.
