BT announced today that from May 1st 2007, they will cut the price they charge other ISPs to use their lines by 9%, as they reiterate their commitment to a competitive market in UK broadband.
If these cost savings are passed on, this move could mean lower-priced broadband for any broadband users signed up with an ISP that uses BT infrastructure (Orange, AOL, Eclipse, Tiscali and Pipex are just a few names who do).
BT also announced that they will be providing industry-leading 24Mb/s bandwidth services soon, probably at the start of next year. The higher broadband speeds and lower costs will help bolster their already strong direct-sign up offerings.
BT Wholesale will cut line charges by 9% from £8.40 to £7.63 a month, with an extra rebate for ISPs using high density equipment (i.e. ADSL2+) - the rebate being around a 12.5% increase changing from £1.10 to £1.24. Previously this rebate only covered 561 exchanges, but now will cover 1016 exchanges across the UK.
This rebate causes the monthly rental price to be reduced from £7.30 to £6.39. However this does not necessarily mean a price drop for broadband customers. Some companies may wish to drop their prices while others may choose to invest the extra money into their infrastructure or simply add it to their bottom line profit.
Along with these price reductions, an extra cessation charge will be added of £33.75 (ex VAT), for those who don’t use the MAC number service, and it looks likely that these costs savings will actually go to the customer - this will aid people switching correctly by using their MAC number.
You can read more about the cessation charges in our news post on 2nd April 2007.