BT reduces DSL charges

BT has announced price cuts for rival DSL broadband providers that lease space in its local telephone exchanges, ahead of an Ofcom ruling.

Regulator Ofcom last week turned up the heat even further on BT by proposing to appoint an independent telecoms adjudicator to promote fairer competition.

The adjudicator would ensure other carriers gain access to BT's local loop network as quickly and easily as BT itself.

BT said it will cut the monthly rental charge for its shared local loop unbundled (LLU) product to £2.26 from £4.42 per line, and will reduce the connection fee from £117 to £83 from 1 June. However, some carriers have already indicated that they will not pass those savings on to customers.

Stefano Nicoletti of research firm Ovum applauded Ofcom's proposal but was ambivalent about the BT price cuts. "Reducing the shared LLU price to £2.26 per line brings it in line with the European average, but BT's connection fee is still about 50 percent higher [than in some regions]," he said.

BT intimated it would cut prices further if more operators join the tiny number already offering shared LLU-based services. These offer buyers more flexibility on price, bandwidth and service levels than BT's other wholesale DSL services.

"Each operator will decide whether the shared LLU business plan now works and it will be highly surprising if no other operators now come into the market," said Justin Fielder, director of business development for LLU-based broadband provider Easynet.