Superfast broadband could get cheaper as BT cuts charges to rivals

Millions of superfast and ultrafast broadband users could benefit from significant price cuts after BT said it would cut almost £100m from what it charges rivals to use its network.

Openreach, the BT-owned subsidiary that controls the UK’s broadband network, is to dramatically reduce what it charges providers such as Sky, TalkTalk and Vodafone to offer superfast and ultrafast broadband.

For example, the amount Openreach charges rivals for its 80Mbps product will be slashed by 40% from £9.95 to £5.99.
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Openreach said the price reductions could help more than 17.5m homes and businesses move to a faster internet service.

So far, 10m British households and businesses have upgraded to superfast broadband on the Openreach network, but such services are potentially available to almost 28m premises.

“This offer is a win-win,” said the Openreach chief executive, Clive Selley. “It will help Britain’s homes and businesses to experience the benefits of faster and more reliable broadband. And it will incentivise our wholesale customers to participate in our long-term investment in digital infrastructure by upgrading more of their customers to superfast and ultrafast services.”

Openreach believes the discounts should see the vast majority of Britain’s homes and businesses upgraded to superfast and ultrafast broadband within five years.

BT said the price cuts would hit Openreach’s revenue and profits “in the order of high tens of millions of pounds” this year.

The move is also designed to stop the UK lagging behind other countries in shifting consumers to faster “full-fibre” networks.

Full-fibre networks are capable of delivering download speeds of 1Gbps – a level seen as necessary to support future digital communications. They are more than 20 times faster than the current UK average speed of 46.2Mbps.

On Monday, the government unveiled plans to drive the rollout of ultrafast broadband networks nationwide within 15 years.

Only 4% of homes in the UK have a full-fibre broadband connection, compared with 89% in Portugal and 71% in Spain.