Ofcom calls for cuts to BT's copper wire wholesale prices

LONDON Thu Jul 11, 2013 10:15am BST

The BT communication tower is seen from Primrose Hill in London April 9, 2013. REUTERS/Suzanne Plunkett

The BT communication tower is seen from Primrose Hill in London April 9, 2013.

Credit: Reuters/Suzanne Plunkett

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LONDON (Reuters) - Britain's telecoms regulator said BT Group Plc should cut the prices it charges rival operators to access its network of copper wires, saying it wanted to increase competition in the provision of landline and broadband services.

Regulator Ofcom said its proposals could lead to real-term price reductions for consumers, if providers such as Talk Talk and Sky pass on the cuts to their telephone and broadband customers.

Ofcom's proposals involve price controls for BT's wholesale division Openreach for "unbundled" lines, whereby the provider takes full or part control of the line, and for wholesale line rental.

"These proposals are complex and we will review them in depth. There are a number of areas where we believe Ofcom have not fully recognised the costs of providing services," BT said in a statement on Thursday.

Ofcom regulates certain charges in Britain's telecoms market, where BT, the former state monopoly, is found to have significant market power. The regulator also said competition had expanded into more parts of Britain over the last three years.

Wholesale prices for a fully unbundled line, currently 84.26 pounds a year, could fall in real terms by inflation minus between 0 percent and 6 percent a year under Ofcom's proposals. It also proposed cuts to shared unbundled line rates and wholesale line rental charges.

The regulator said it would consult on the proposals - which come after it last week put forward changes to charges for BT's fibre optic network - later in the year, after it had studied the service and fault levels of BT's copper network.

Shares in BT were up 1 percent in morning trading, in line with Britain's blue-chip FTSE 100 index.

(Reporting by Paul Sandle and Sarah Young; Editing by David Holmes)

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