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BT Wholesale Cuts Broadband ISP Bandwidth Charges for UK Rural Areas

Wednesday, April 4th, 2012 (8:03 am) - Score 1,596
bt wholesale uk

BTWholesale, the wholesale division of national UK telecoms operator BT, has this week informed internet providers about a number of new broadband price changes. The biggest of which is a 13% reduction in the price of its IPstream Connect (i.e. up to 8Mbps ADSL technology) contracted bandwidth for Market 1 (rural) areas.

The telecoms regulator, Ofcom, classifies different parts of the country based upon the amount of competition from ISPs in any given area (i.e. Market 1, Market 2 and Market 3). Market 3 areas are typically home to four or more ISP and thus have the lowest prices due to de-regulation and competition.

By comparison Market 1 is essentially the opposite because the only available services come from BT’s network (affects 11.7% of UK homes and businesses in mostly remote and rural areas [3 million premises]).

Sadly most Market 1 areas do not yet have access to faster up to 20-24Mbps capable ADSL2+ broadband technology, although BT is currently working to expand their coverage to 90% of UK premises (22.5 million homes and businesses) in time for Spring 2013.

BTWholesale statement to ISPreview.co.uk:

BT Wholesale [has] announced a number of broadband price changes (on Monday 2nd April 2012) the most significant being a 13% reduction in its Market 1 IPstream Connect contracted bandwidth pricing which covers the least densely populated parts of the country. It comes into effect on 1 July 2012 and will help Communication Providers (CPs) meet the growing demand for end user bandwidth in ‘rural’ areas. Additionally, we’ve made other price changes to end user elements of BT Wholesale’s legacy broadband services.

Where next generation broadband is available, we are encouraging our customers to reap the benefits of it. But, as today’s announcement demonstrates, BT Wholesale continues to take steps to ensure broadband performance and value is maximised for Market 1 end users too.

Last year Ofcom also ordered BT to cut its wholesale broadband charges to ISPs by 12% below inflation for Market 1 areas (here), which came into effect during mid-August 2011 and should last until 31st March 2014.

This week’s move should help to make it a little cheaper for ISPs to deliver broadband into rural areas, although those affected will already be somewhat constrained by slower connectivity. We’re currently trying to find out what the “other price changes to end user elements of BT Wholesale’s legacy broadband services” refers to.

Leave a Comment
13 Responses
  1. Too little. Too late. It won’t fool anyone. We have been robbed for years. Paying up to £23 a month to some ISPs for less than a megabit per second due to long phone lines. ADSL2+ will not improve the situation, nor will cabinets because there aren’t any. It is the price you pay for living more than a few km from an exchange.
    Putting your head in the sand and believing the incumbent will fix this with funding is not the answer either, we need new entrants to the market to deliver a competitive service where the big telcos fear to tread. That is where the funding should have gone, not to BT to patch up their old phone network.

  2. Avatar Kits

    The problem of the market 1 exchanges will cause issues to ISPs under the new rulings by ASA many ISPs might now decide to not accept these areas. The slower speeds would lower the averages ASA say the ISP’s have to use to new customers, I see this causing more confusion to EU plus ISP’s more selective on accepting lower speeds as they will reduce the avearges they have to use.

    Another idea brought about by those in the power with no knowledge of the ISP industry

    • Avatar New_Londoner

      Agree, unintended consequence of dumbing down rules for those not able to understand “up to”. Those on long lines may find some ISPs very reluctant to provide them with service as it will make the ISP’s stats look bad when advertising.

  3. Avatar Phil

    Yeah agree, far too late! too late! BT had the biggest laughing at those who still on market 1 with very poor speed expect to pay the highest price compare with the same product (market 3) get the cheapest price an max out the highest sync rate speed. Seem totally wrong and unfair. I like to see the prices in fairer way due to speed:

    1-2 Meg – 80% of price reduce
    2-4 Meg – 70% of price reduce
    4-8 Meg – 55% of price reduce
    8-12 Meg – 45% of price reduce
    12-21 Meg – no reduce

    • Avatar Phil

      forget to add: 512K to 2 Meg – 90% price reduce

    • Avatar Martin Pitt - Aquiss

      You mean how it used to be before Capacity based charging was introduced?

    • Avatar New_Londoner

      The sliding scale charging idea is all very well, but you’re consuming the same best-efforts broadband whether you can get 0.5Mbps or 20Mbps. Market 1 areas are by definition the least attractive economically, otherwise they wouldn’t be Market 1, this sort of sliding scale pricing would make them even less attractive and so even less likely to get LLU etc.

  4. Avatar SlowSomerset

    Get so annoyed with paying for up to 8meg and as I work all day when I want to us the Internet in the evening lucky If I can get 1meg so iplayer or any of the latest digital formats are a waste of time.
    Its like paying for a pint of beer and getting a fraction of a pint.

  5. Avatar SlowSomerset

    Oh by the way will probably get the new power station built nearby before we get any BDUK funds.

  6. Avatar onephat

    if ISP’s are charged less for market 1 connections surely that will mean their less likely to install their own equipment as there will be less of a cost saving now so it could actually make the situation worse?

    • Avatar Martin

      Clearly keeping the Market 1/2 prices high has NOT WORKED !

      Except for BT which is laughing all the way to the bank..

  7. Avatar DTMark

    Excellent. I can now save a few pennies if I wanted to reactivate that (100 year old?) knackered piece of copper and/or aliminium which can’t even do broadband, and lose most of my speed versus 3G.

    Mobiles do calls. 3G can do broadband which walks all over ADSL here both upstream and downstream, and I suspect in a fair few other places where the lines are much more than 3km long.

    Shouldn’t these knackered, basically nearly useless things be almost free now? I’d probably have it if it were given away as a backup but it’s valueless otherwise.

    • Avatar New_Londoner

      These “nearly useless” things should be capable of supporting close to 70Mbps or above download speed for most (~70%) of us, unlike 3G. Worth bearing in mind the average speed of mobile broadband in the UK is, IIRC, < 25% of the average obtained with a fixed line, and that's after excluding cable.

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