Millions of people in rural areas of the UK could be set to receive better value broadband services by the end of 2011.
Ofcom, the independent regulator and competition authority for the UK communications industries, is reducing the prices that BT Wholesale can charge internet service providers (ISPs), which is likely to affect the less densely populated areas of the country.
The reduction will see prices fall to 12% below inflation each year, and will only apply to services using BT’s wholesale broadband network, and Ofcom has said that the lower prices should lead to even more competition between retail ISPs, which in turn should lead to better prices for consumers.
A knock-on effect of this is that ISPs should be able to allocate more bandwidth to each customer, culminating in faster and cheaper Internet for around 3 million homes and businesses.
Ofcom expects the reduction to incentivise ISPs to invest in and launch their own networks in more rural areas and help them compete with BT Wholesale. And given that ADSL 2+ will be exempt from the charge controls, it’s thought that this should encourage BT Wholesale to invest in this new technology and upgrade its own services too.
The areas that will benefit include rural parts of Scotland, Wales and Northern Ireland, as well as the South West of England, Norfolk, Yorkshire, Cumbria and Northumberland. A full list of the areas where the wholesale charge controls will apply can be found here.
We reported earlier this year that 4G LTE broadband was to be trialled in rural parts of the UK later this year, which is part of a broader plan to bring fast, affordable Internet to everyone in the country, irrespective of location. But the full roll-out of this service isn’t expected to happen for another few years, so these latest plans should help to bring faster and cheaper Internet access to more people quicker.
The charge controls will come into effect by mid August 2011.
Ofcom recently mapped out the fixed broadband situation across the UK, illustrating broadband speeds, take-up and availability of super-fast broadband in each area of the UK: