Ofcom makes switching broadband cheaper
Wednesday 3rd July 2013
The cost of switching superfast broadband providers is set to drop by up to 80 per cent as Ofcom introduces a plan to shake up competition in the market.
As well as cutting costs, the regulator hopes to reduce the minimum length of contracts so that customers can swap providers more quickly.
In a statement announcing its consultation on the matter, Ofcom said: "The proposals are designed to promote competition in the superfast broadband market at the wholesale level. These would be expected to flow through to consumer benefits in the form of lower retail prices and easier switching between superfast broadband providers."
This is good new for businesses who rely on technologies such as the cloud to keep things running. Certainly this is the case for many businesses who operate flexible working policies as they and their employees rely on applications such as Lync to stay connected to people at all levels.
Ofcom hopes that these new proposals will create competition between providers, such as BT, which also sells its network to other telecommunications providers like TalkTalk.
In fact, BT's minimum contract lasts for one year, while Ofcom hopes to reduce this to one month. Additionally, when providers using BT's Openreach network move customers to their service they are charged £50. Usually this charge is passed down to the customer, according to Ofcom. The regulator plans to cut this cost to somewhere in between £10 and £15.
Broadband providers have often complained about BT's dominant position in the market putting them at a comparative disadvantage. Indeed, by 2012 the number of people who were using BT's superfast fibre broadband service reached 1.4 million.
Yet rather than putting restraints on the amount that BT can charge to its rivals, Ofcom simply said that BT must ensure that its prices are "fair and reasonable".
BT welcomed the plan and said it was glad that Ofcom had decided against putting price constraints on its Openreach service. It added that the price it charges operators like TalkTalk are the same that its own divisions receive.