BT price rises force broadband price increase
Filed under: News | By: Peter Chubb
Posted on: March 10, 2009 | 1 Comment
It is expected that millions of broadband users face an annual increase of more than £30 over the next three years, a direct result of BT (NYSE:BT) price rises. It is expected that the wholesale charge that BT impose on rival companies to use their lines for broadband and telephone services is expected to increase by more than 35 percent by 2012.
If this increase goes ahead, then up to 800,000 households will not be able to afford home broadband, this goes against the Government policy that they want broadband access for all income groups.
Dr Chris Doyle of Warwick Business School is the one who has conducted the study, and is arguing that BT will be profiteering by increasing the price of broadband. Carphone Warehouse, who provides broadband through their Talk Talk Internet service, has financed the study.
BT is planning to increase the price of wholesale costs of broadband by 11 per cent, from £81.69 per year to £91 per year from April.
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This price rise will be taken advantage of by the LLU services (Be/O2, Carphone Warehouse/TalkTalk, BSkyB, etc) to increase their market share.
While those with FTTC (news pages 24th March) may be willing to pay more as they may see an improvement, the majority, esp those in rural areas (last to see any higher speeds, and deserving of a level playing field as they include businesses too) will have incentives to switch from BT for internet access.
Three (which I am using now) is offering 15 GB/month for 15 pounds right now, which is about the starting cost for many ISPs (offering under 5 GB/month) so what will that ISP be doing in 2012/2013 ? Answer: wondering where all their customers have gone. They will be paying BT about 12 pounds before they pay for any traffic, staff, advertising, etc…