Ofcom to cap BT's Openreach prices

Communications regulator Ofcom is to limit the amount that BT can charge its rivals to use its Openreach network as part of an effort to promote competition.

Ofcom said it would place a cap on the amount BT can charge for its superfast broadband services, which have a maximum speed of 40Mb/s.

It is hoped that the move will lead to cheaper prices for customers, as well as promoting competition in the broadband market.

BT will also be required to complete repairs and line installations more quickly, and could be fined it it fails to meet certain targets.

“Our plans are designed to encourage long-term investment in future ultrafast, full-fibre networks, while promoting competition and protecting consumers from high prices,” said Ofcom's competition group director, Jonathan Oxley.

“People need reliable phone and broadband services more than ever. We're making sure the market is delivering the best possible services for homes and business across the UK.”

The cap will not apply to BT’s higher-speed services.

Earlier this year Ofcom ordered BTT to legally split Openreach.

.Although it will still be part of the wider BT group, Openreach will become a distinct company in its own right, with its own staff, management and strategy.

The regulator, along with BT’s competitors, have been concerned that because BT owns the infrastructure that connects the majority of UK homes and businesses to national broadband networks, it is able to make strategic decisions that directly favour its own retail business.

Read our analysis of the move here.

(Image: Kainet)