BT to slash LLU costs

Claims it will lead to greater competition

BT is to cut the cost of local loop unbundling (LLU) in the UK in a move it claims will increase infrastructure competition.

The UK's dominant fixed line telco is to slash the cost of some products by up to 70 per cent as part of a phased series of cuts, the company anounced today.

Prices are to fall by around 35 per cent from June 1, and a further 25 per cent come September. Prices could fall a further 10 per cent depending on the volume of lines that are unbundled.

A spokeswoman for BT was unable to say exactly at what level prices are likely to be set. However, she did say that by the end of the year the UK should be within the "top five" European countries for competitive LLU pricing.

As part of the cost cutting BT is also to re-design and simplify its current LLU product more in line with those on offer in Europe.

BT says the new offering will "benefit those companies who are willing to invest and innovate" and should reduce the need for future regulatory intervention.

Ben Verwaayen, BT chief exec, said: "BT has always argued that a market needs to develop in which those who are willing to invest and innovate can reap the rewards. This is a significant step in that direction.

"We now have a far clearer idea of how Ofcom sees the market developing and we share their view that competition based at the infrastructure level will be good for everyone and for the UK in general.

"Their statements about regulatory certainty are crucial as we have enormously ambitious plans for the networks of the future and require that certainty for shareholders if we are going to invest the huge sums required."

The UK's telecoms industry is currently looking at BT's proposals to ensure that the detail matches the company's rhetoric. Last month BT signaled that it might be prepared to cut LLU costs for rival operators, after the regulator hinted that prices should fall. ®

Related story

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Ofcom hints at LLU cost cuts
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