Ofcom slashing broadband pricing, wants retailers to charge less

British broadband customers could soon be paying less for fast broadband, under plans unveiled by Ofcom on Friday.

The regulator announced it was looking to slash the price Openreach could charge broadband retailers for the so-called ‘fibre’ services, which used VDSL copper technology to deliver fast broadband through telephone lines.

It came just a few weeks after Openreach owner BT Group confirmed it was going to operationally separate the division, which owns and maintains almost all phone lines in the United Kingdom.

On the price cut plans, Ofcom said it would expect retailers - which include Sky, TalkTalk and BT’s various retail brands - to pass on the savings to consumers through cheaper bills.

Under the plans, the wholesale price charged by Openreach for the basic 40 megabit-per-second fibre plan would fall to £66.28 per year in 2018, and £52.77 by 2020, from £88.80 currently.

Prices for faster broadband would not be similarly regulated, however, with Ofcom saying it hoped that would encourage retailers to install their own lines and equipment to compete with Openreach on speed and service.

“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.

The plans would not affect broadband provided by Virgin Media - owned by Liberty Global - or service in areas not serviced by BT, such as Hull - served by KCOM - as they own and operate their own networks.

It was part of a wider broadband shake-up from Ofcom, after it announced new plans to fine Openreach and retailers for poor service earlier in the month.

This week, BT Group itself was issued a record £42m fine by Ofcom, for delays in installing fast broadband equipment in a number of areas.