Ofcom outlines new wholesale charge controls for Openreach

6 Feb 2012

The UK’s telecoms regulator Ofcom has revealed that it has notified the European Commission (EC) regarding provisional new charge controls that will apply to certain services provided by fixed line incumbent BT’s wholesale division, Openreach. With prices regulated by the watchdog due to the telco having been designated with significant market power (SMP), it has published a draft decision in line with the EC’s notification process, noting that the it is the first time the new procedure has been used for a major regulatory decision on telecoms in the UK.

Under the proposals, Ofcom has recommended that the annual cost of a fully unbundled line would drop to GBP87.41 (USD138.16) per year for the 2012/13 financial year (which begins in March 2012), down from the current cost of GBP91.50. Looking forward this fee would then decrease further in the following financial year, with the reduction calculated using the formula of RPI -5.9%. A shared unbundled line meanwhile, which currently costs GBP14.70 per year, is expected to be reduced to GBP11.92 for FY2012/13, before falling further in the following fiscal year by RPI -15.9%. Rounding out the regulator’s price proposals, it also revealed that the cost of wholesale line rental would be reduced to GBP98.81 per annum from its current rate of GBP103.68 from March 2012, with a further reduction due in FY2013/14 using a formula of RPI -7.3%.

Having sent its proposals to the EC, Ofcom says it now expects to publish a final decision in early March.

United Kingdom, BT Group (incl. Openreach), Ofcom