February 23, 2018 / 9:28 AM / a month ago

UK regulator to cap prices BT can charge rivals for use of fast broadband

LONDON (Reuters) - Britain’s telecoms regulator will cap the price BT can charge rivals to use its fast broadband service and make it easier for all providers to use the company’s infrastructure to build their own networks to boost the roll-out of fiber.

FILE PHOTO: A passer-by talks on their phone as she passes a branded sign displayed outside of a BT building in London, Britain January 27, 2017. REUTERS/Neil Hall/File Photo

Full fiber broadband is many times faster - and around five times more reliable - than today’s superfast internet services, but is available to just 3 percent of Britain’s homes and businesses, Ofcom said on Friday.

It hopes that making it easier for rivals to access the former monopoly’s telegraph poles and underground tunnels will speed up the delivery of new networks at cheaper prices.

Companies including Vodafone, TalkTalk, as well as BT itself, have announced investments in new fiber networks in recent months.

Ofcom said it would cap the amount BT’s Openreach network could charge rivals to use its fiber-copper product, which generally offers speeds up to 40 megabits a second, to help rivals attract customers while they build their own networks.

The cap will be gradually reduced to reach 11.92 pounds ($16.66) a month by 2020/21.

BT said the price cap would reduce Openreach’s revenue and profit in its 2018/19 financial year by 80-120 million pounds, and have further impacts in the following two years in the range of low to mid tens of millions of pounds.

The price cap, however, is more generous to BT than the 11.23 pounds Ofcom proposed last year.

“Today’s statement from Ofcom gives us certainty on the pricing of key products for the next three years,” the company said.

“We can now look forward and get on with the job of making fiber-to-the-premises broadband available to three million homes and business by the end of 2020.”

BT’s shares were up 3.9 percent at 241 pence in early Friday trading, topping the FTSE 100 index.

Digital minister Matt Hancock said Ofcom’s measures would be instrumental in supporting full fiber roll-out by promoting competition and ensuring widespread availability of services.

TalkTalk, which uses the Openreach network, said it was good news for consumers, competition and investment.

“Ofcom’s move not only protects customers in today’s market, but also ensures Openreach and others are encouraged to invest in the full fiber networks of tomorrow,” a spokesman said.

Reporting by Paul Sandle; Editing by Edmund Blair and Mark Potter

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