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LONDON (Reuters) - Rural areas in Britain could be set for cheaper broadband services after the communications regulator Ofcom proposed significant reductions to the prices BT can charge Internet service providers.
Ofcom said it had proposed cutting the prices BT can charge in parts of the country where it is the sole provider of wholesale broadband services, which is mainly in rural areas.
The proposed price reductions are between 10.75 percent and 14.75 percent below inflation and Ofcom said it could increase competition between retail Internet service providers.
It is expected to benefit nearly 12 percent of UK households or around 3 million homes and businesses.
BT said it understood Ofcom's desire to move to a more formal wholesale broadband pricing control in rural parts of the country but said it must not deter investment.
"It is key that the details strike the right balance between control and incentives to invest in rural areas," a spokeswoman said. "As the UK's main investor in rural broadband, we will engage fully in the consultation process which follows to make our case."
The spokeswoman added that Ofcom's decision would not have a material impact on the company.
Reporting by Kate Holton; Editing by Paul Sandle