The company is the only operator in many smaller telephone exchanges and ISPs have to factor 'renting' BT's equipment into their price plans. Rural broadband bills could fall after telecoms regulator Ofcom moved to cut the wholesale price that BT charges other internet providers. That means customers often miss out on cheaper deals available in towns and cities. The reduction only affects broadband services of up to 8Mbps.
From mid August until March 2014, Ofcom has ruled that BT must cut its rates by 12% below inflation per year. The Countryside Alliance said it was "delighted" by the decision. "People living in the countryside have been left behind in the digital divide for far too long and it is vital that they have effective and affordable broadband if their rural economies are to grow and prosper," said a spokesperson.
The government is keen to see next-generation services thrive in rural as well as urban areas as it aims to make the UK the fastest broadband nation in Europe by 2015. Critics have argued that relying on copper technologies will not future-proof networks and have urged operators to invest in fibre optics which can provide much faster services.
"Any retail price reductions that follow from this wholesale announcement will be welcomed by consumers, but the extent to which providers will reduce prices is uncertain," said Sebastien Lahtinen, co-founder of broadband news service ThinkBroadband.
"The wholesale cost reductions may be used by broadband providers to ease congestion at peak times by adding capacity instead."
"It is also important to note that the price control only applies to 'up to 8 meg services', which may be seen as a regulatory green light to encourage BT to upgrade rural exchanges to support faster 'up to 24 meg' ADSL2+ services, in the knowledge that they will be able to secure a higher return on investment," he added.
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