Millions of superfast and ultrafast broadband users could benefit from significant price cuts after BT said it would cut almost £100m from what it charges rivals to use its network. Openreach, the BT-owned subsidiary that controls the UK’s broadband network, is to dramatically reduce what it charges providers such as Sky, TalkTalk and Vodafone to offer superfast and ultrafast broadband. For example, the amount Openreach charges rivals for its 80Mbps product will be slashed by 40% from £9.95 to £5.99. Openreach said the price reductions could help more than 17.5m homes and businesses move to a faster internet service. So far, 10m British households and businesses have upgraded to superfast broadband on the Openreach network, but such services are potentially available to almost 28m premises. “This offer is a win-win,” said the Openreach chief executive, Clive Selley. “It will help Britain’s homes and businesses to experience the benefits of faster and more reliable broadband. And it will incentivise our wholesale customers to participate in our long-term investment in digital infrastructure by upgrading more of their customers to superfast and ultrafast services.” Openreach believes the discounts should see the vast majority of Britain’s homes and businesses upgraded to superfast and ultrafast broadband within five years. BT said the price cuts would hit Openreach’s revenue and profits “in the order of high tens of millions of pounds” this year. The move is also designed to stop the UK lagging behind other countries in shifting consumers to faster “full-fibre” networks. Full-fibre networks are capable of delivering download speeds of 1Gbps – a level seen as necessary to support future digital communications. They are more than 20 times faster than the current UK average speed of 46.2Mbps. On Monday, the government unveiled plans to drive the rollout of ultrafast broadband networks nationwide within 15 years. Only 4% of homes in the UK have a full-fibre broadband connection, compared with 89% in Portugal and 71% in Spain. In the UK, Openreach has made full-fibre speed broadband available to fewer than 1m homes, but has pledged to extend it to 3m by 2020 and 10m by the middle of the next decade. Rivals including TalkTalk and Vodafone have struck deals with providers including CityFibre to also roll out full-fibre networks, focused on larger cities. “Openreach’s decision to lower wholesale fibre pricing is good news for customers,” said Tristia Harrison, chief executive of TalkTalk. “We have long argued that lower wholesale prices are essential to driving higher fibre take-up, which leads to happier, more loyal customers.” However, Openreach’s price cuts will only result in lower prices for consumers if providers pass on their savings.Last year, media regulator Ofcom forced Openreach to slash a third off what it charges rivals for the most popular 40Mb superfast broadband package – from £88.80 a year to £59.04 by 2020-21 – to try to stimulate consumer uptake. Since then, providers’ savings have not been passed on to consumers, prompting Margot James, the digital minister, to call for price cuts to make faster broadband services more attractive and affordable.
Openreach has announced almost £100m ($131m) of price cuts, which will dramatically reduce what it charges TalkTalk and other providers to offer superfast and ultrafast broadband. The price discounts aim to encourage more than 17.5 million homes and businesses move to faster, more reliable internet services, helping to stop the UK lagging other countries in shifting consumers to full-fibre networks. The news comes as the government revealed a target for ultrafast broadband networks to be rolled out nationwide within 15 years.