BT Wholesale Cuts Broadband ISP Bandwidth Charges for UK Rural Areas

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.