March 28, 2018 / 7:02 AM / 25 days ago

UK regulator caps price BT can charge rivals to use fast broadband

(Reuters) - BT, Britain’s biggest broadband, will have to reduce what it charges rivals to use its fast broadband service and make their access to its infrastructure easier, regulator Ofcom said on Wednesday, as it looks to help the roll-out of fibre networks.

A man speaks on a mobile phone underneath a BT logo outside of offices in the City of London, Britain, January 24, 2017. REUTERS/Toby Melville

“BT must make its telegraph poles and underground tunnels open to rival providers, making it quicker and easier for them to build their own full-fibre networks directly to households around the UK,” the regulator said.

Ofcom said it had decided not to regulate the prices of Openreach’s fastest wholesale broadband products, including those delivered using its new full-fibre services.

The measures were submitted to the European Commission for consultation last month and following its review, the commission provided no comments, Ofcom said.

Full fibre 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 in February.

Ofcom said it would cap the amount BT’s Openreach network can charge rivals to use its entry-level superfast broadband service, which generally offers speeds up to 40 megabits a second, to help rivals attract customers while they build their own networks.

The cap on the monthly charge will be gradually reduced to 12.06 pounds a month by 2020/21.

That is higher than the 11.23 pounds which Ofcom had proposed last year and its February proposal of 11.92 pounds.

The regulator said on Wednesday that it had raised the figure to reflect new information, particularly in relation to inflation and BT’s pension costs.

BT said last week it would close a defined benefit pension scheme affecting 20,000 staff.

Britain’s biggest mobile provider said last month that it expected Ofcom’s price cap to reduce Openreach’s revenue and profit by 80-120 million pounds in its 2018/19 financial year.

BT did not respond to a request for immediate comment on Wednesday.

BT shares were down 0.36 percent at 221.3 pence at 0813 GMT, while those of TalkTalk , which uses the Openreach network, were down 0.9 percent at 111.2 pence.

Reporting by Noor Zainab Hussain in Bengaluru; editing by Jason Neely

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