Ofcom has officially finalised the connection and rental charges for Local Loop Unbundling (LLU) services, which will come into effect from 1st January 2005. LLU allows rivals access to install their own kit in BT's exchanges.

To cut a long story short, the prices are now as follows:

Shared access - (£Present Price) - £New Price
Connection - (£37.00) - £34.86
Rental - (£27.12) - £15.60

Fully unbundled - (£Present Price) - £New Price
Connection [transfer] - (£88) - £34.86
Connection [new provide] - (£223.33) - £168.38
Rental - (£105.09) - TBD

There have clearly been strong reductions to May's preliminary changes. Typically BT has responded by welcoming the news:

Paul Reynolds, chief executive of BT Wholesale, said: “BT has been working hard with Ofcom since May on this issue, and these price reductions are absolutely in line with what we jointly agreed then. I believe they are right for the industry.

“Price alone isn't the only issue though: BT has worked productively with the Adjudicator and the industry to develop suitable processes. Together with this package of price changes we believe the right climate has been created to develop a market in which those who are willing to innovate and invest can reap appropriate rewards.”

By investing in new automated processes, BT has been able to significantly reduce LLU costs and these savings have been converted into price reductions which have been progressively introduced since May 31 this year.