BT cuts prices for ISPs

BT Openreach announces lower charges for service providers. Are broadband prices set to fall?

Broadband prices may fall again after BT’s Openreach offshoot last week announced lower charges for service providers to transfer customers from BT’s wholesale broadband services to Openreach’s shared local-loop unbundled (LLU) offering.

Openreach will reduce the price for LLU operators migrating customers in bulk from BT Wholesale’s broadband products to competing services by 27 percent, giving a new price of £25.39 + VAT from 1 July. The offer will be available to LLU operators that migrate their existing IPstream or Datastream end-customers in bulk to shared LLU.

Openreach also announced a mass migration product letting LLU operators migrate BT Wholesale broadband and phone customers to full LLU at a cost of £27.54 + VAT.

Under Ofcom rules the price is fixed unless BT hits 1.5 million unbundled lines or until July 2007. It remains to be seen whether ISPs will pass on the savings to customers. According to Openreach, there are now more than 400,000 LLU lines in place.

Sandra O’Boyle of Current Analysis said, “Carphone Warehouse and the other LLU customers should be happy with the price cuts but only if BT systems supporting the line transfers are right first time.”

In related news, Carphone Warehouse said that 340,000 customers had signed up for its Free Broadband; and Bulldog announced that it will now focus on wholesaling its LLU capability rather than selling direct to end-users and small firms.