Ofcom proposes new wholesale prices for Openreach

31 March 2011

A telephone exchangeOfcom today proposed new regulatory controls on the prices of wholesale broadband and telephone services provided by Openreach, the access division of BT.

Ofcom expects these proposals to lead to real term price reductions for consumers, as communications providers pass on savings to their landline voice and broadband customers.

Today's consultation covers charges for local loop unbundling (LLU) and Wholesale Line Rental (WLR).

Broadband and phone services

These services are used by communications providers to offer broadband and telephone services to consumers using lines rented from Openreach.

The proposed prices strike a balance between providing incentives to invest in networks and ensuring that broadband and landline prices are good value for consumers.  

LLU and WLR support the competitive provision of broadband and telephony services across the UK.

LLU is a process which allows companies other than BT to install their telecoms equipment in the local BT exchange.

These companies can then offer their own direct phone or broadband services. There are over 30 different companies providing unbundled services to homes and small businesses.  

WLR enables communications providers to offer telephone services to consumers using lines rented from Openreach.

Unbundled lines

The number of 'unbundled' lines has increased from 123,000 in September 2005 to 7.59 million today and there are 6.14 million WLR connections in the UK.

In 2005 just 4 per cent of households had their landline with providers other than BT or a cable provider - now 26 per cent take their landline from an alternative provider.

Ofcom's research shows that there are now over 19 million broadband lines in the UK. Of these more than 70% are provided by companies other than BT, many on the basis of unbundled lines.

Greater competition has also meant lower bills for consumers.

Today consumers are paying on average 52 per cent less for an equivalent broadband service than they did in 2005.

Read the consultation