Packnet Blog

Ofcom proposals could mean cheaper broadband for businesses

Business and domestic broadband users are set to receive more value for money with their broadband service according to proposals by Ofcom (The Office of Communications).

The industry regulator has proposed that the prices that BT charges in areas of the UK where it is the only provider of broadband services should be slashed. This would mainly apply to small towns, hamlets and rural areas.

If the changes were to go through, prices could be reduced by 10.75 per cent and 14.75 per cent under inflation. This is great news for domestic users who may use heavy demand broadband services such as Skype, and small to medium businesses wishing to take advantage of IP telephony with the installation of upgraded business phone systems.

It is anticipated that the move will stimulate competition between service providers, which in turn leads to lower prices for consumers. The changes could benefit more than 12 per cent of broadband users around the United Kingdom, or more than 3 million businesses and homes.

The changes would also signal faster broadband, meaning that Voice Over Internet Protocol (VoIP) telephony would become a viable proposition for many smaller businesses and start-ups looking to reduce overheads whilst having as much flexibility as possible with their business phone systems.

By introducing a competitive element, Ofcom aims give BT an incentive to lower the charges they make to internet service providers. If the plans go ahead, they will come into effect mid-2011.

The announcement comes after a decision made by Ofcom at the end of 2010 to remove regulations regarding the wholesale of broadband in areas of the United Kingdom where they deem that broadband is working effectively. The report revealed that 78 per cent of homes and businesses in the UK have a choice in service providers today, compared to 69 per cent in May 2008.

Callum Byrnes