Broadband price cuts likely to win Oftel approval

The reductions in the cost of BT's wholesale ADSL products looks set to get a green light from the regulator
Written by Graeme Wearden, Contributor

It's still early days, but the indication from Oftel is that it is likely to approve BT's broadband price cuts.

BT is claiming that it has achieved the cost reductions through a combination of economies of scale, cheaper hardware and lower engineering costs. If Oftel agrees, then BT's lower prices -- which will mean consumers paying £30 or less per month for broadband -- will come into effect on 1 April.

Oftel has been examining figures supplied by BT last week, and this data would appear to back up BT's claim. "We've not checked BT's figures in great detail yet, but the initial reaction is positive," an Oftel spokeswoman told ZDNet UK on Tuesday. "We're pleased by the price cuts, and very happy that BT did its calculations before announcing price reductions," she added.

There had been concerns that the regulator might block the reductions in the cost of BT's wholesale ADSL, on the grounds that the company was acting in an anti-competitive manner and selling its product below cost price -- something it is forbidden to do.

Bulldog Communications, which plans to install its equipment in BT's local exchanges and offer its own wholesale products, claimed earlier this month that BT would only be able to achieve significant savings by selling its products at a loss. However, Oftel had not yet received any complaints about today's price cuts.

Many ISPs have already promised to pass on BT's cost saving to customers, and the telco's announcement has been praised by the e-commerce minister, Douglas Alexander.

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