13th Nov 2006 11:00
BT Group PLC13 November 2006 DC06-604 13 November, 2006 BT OUTLINES NEW WHOLESALE BROADBAND PRICING BT today revealed how it plans to reduce its wholesale broadband pricing once1.5m lines have been unbundled. 1 The indicative prices are aimed at offeringservice providers a cost effective alternative to Local Loop Unbundling (LLU). The new pricing structure 2 is intended to come into effect from May 2007 - atwhich point BT believes the UK will have achieved 1.5 million LLU lines - andwill be implemented in two stages. The unveiling of the proposals will enableservice providers to plan ahead. From May 2007, service providers will see the rental charge for the most highlyused wholesale broadband product - BT IPstream - reduced by 9 per cent, with theprice coming down from £8.40 per line per month to £7.63. This price is expectedto be reduced further in the second round of changes planned for January 2008. There will also be further savings for service providers at high densityexchanges. The current rebate scheme that applies at 561 of these exchanges isset to be revised to cover 1,016 exchanges. The level of this rebate is also setto increase from £1.10 to £1.24 from May 2007. The rebate reflects the lowercost of providing broadband in these areas. The increase in the rebate - combined with the lower rental price - will reducethe net monthly rental price (i.e. rental less rebate) in these exchanges from£7.30 to £6.39. This is a reduction of 12.5 per cent. Further increases to therebate are also planned from January 2008. Cameron Rejali, BT Wholesale managing director for products and strategy, said:"These pricing proposals will help our ISP customers develop their businessplans and compete effectively in the broadband market. The proposed pricesbetter reflect the economies of scale and input costs we face, meaning we candeliver lower average costs to ISPs. The industry has been waiting to hear howwe will enable them to compete with the local loop unbundlers and so theseproposals should allow them to plan ahead." Service providers choosing the BT Datastream product - a simpler service thanthat provided by the BT IPstream product - are also set to benefit from therevised rebate scheme. The existing rebate of £1.15 for connections to thecurrent 561 exchanges will be extended to the 1,016 designated exchanges. Thiswill effectively reduce the rental charge per end user from £7.05 to £5.90 inthose areas from May 2007. BT Wholesale has started to purchase the LLU product and will consequently becharged for the provision and cessation of a line from Openreach. From May 2007,BT Wholesale intends to reflect these charges through connection and cessationcharges for its service provider customers. As a result, the connection chargefor BT IPstream and BT Datastream products will come down from £40 (ex VAT) to£34.86 (ex VAT) reflecting the charges from Openreach. A cessation charge is also set to be introduced where service providers orderthe termination of service on an end user's line. This charge of £33.75 (ex VAT)reflects the input costs from Openreach. The cessation charge will not applywhen a consumer wants to move from one service provider to another and bothservice providers use the MAC process. BT's aim is to encourage more serviceproviders to participate in the MAC process, which is designed to make itsimpler for consumers to move from one service provider to another. Thecessation charge will also not apply where there are bulk migrations to LLU. Finally, BT Wholesale also confirmed today it intends to trial WholesaleBroadband Connect in selected exchanges across the UK from Summer 2007. This isa new next generation broadband service created using 21CN. Using ADSL andADSL2+ technology, it will provide national connectivity enabling communicationsproviders to connect their broadband and data customers to their own networksand services efficiently and cost effectively. With planned speeds of up to 24Mbit/s, BT Wholesale Broadband Connect is set to be available to almost half theUK from early 2008, with nationwide coverage linked to the rollout of 21CN. Note: Prices are subject to BT's ongoing legal and regulatory obligations andcommitments and are indicative and could be subject to change prior to formalpricing notification. -ends- . Inquiries about this news release should be made to Gemma Thomas or Anna Eastonin the BT Group Newsroom on its 24-hour number: 020 7356 5369. From outside the UK dial + 44 20 7356 5369. All news releases can be accessed at our web site: http://www.bt.com/newscentre. About BT BT is one of the world's leading providers of communications solutions andservices operating in 170 countries. Its principal activities include networkedIT services, local, national and international telecommunications services, andhigher-value broadband and internet products and services. BT consistsprincipally of four lines of business: BT Global Services, Openreach, BT Retailand BT Wholesale. In the year ended 31 March 2006, BT Group plc's revenue was £19,514 million withprofit before taxation of £2,040 million. British Telecommunications plc (BT) is a wholly-owned subsidiary of BT Group andencompasses virtually all businesses and assets of the BT Group. BT Group plc islisted on stock exchanges in London and New York. For more information, visit www.bt.com/aboutbt -------------------------- 1 Under the Telecommunications Strategic Review, BT made a commitment that itwould not lower the prices of its wholesale broadband offerings until the UKachieved 1.5 million LLU lines. 2 The pricing proposals are in line with additional commitments made to Ofcomto ensure pricing stability in the broadband marketplace. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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