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Talk of no more forced price changes by Oftel
Tuesday 04 November 2003 17:06:00 by Andrew Ferguson

The Register has reported on the rumours that the next report due out from Oftel in a months time will not call for further Wholesale price reductions.

The current Oftel boss David Edmonds gave an interview to the Financial Times where he appeared to say that Oftel is happy with the current situation. How you take this statement and the remainder of The Registers story depends on your position. Certainly we have seen the consumer targeted 500 service come down from £35/month in August 2000 to £13/month now, and even larger price cuts in the business 1Mbps and 2Mbps products.

Where the pressure for action is coming is from the LLU operators and companies trying to grab a foothold using the BT Datastream products. For Datastream the port cost per user is generally reasonable, what is causing problems is the cost of the back-haul that must be rented for Datastream products to be useful.

A lot of the political and public pressure is to get everyone some form of reasonably priced broadband access, but this should not chased to the exclusion of ensuring the UK broadband market does move on. The Datastream products while still relatively immature and exhibiting various problems are at the cutting edge speed wise for the UK, in fact they are the only way people can get close to 2Mbps for around £30/month over ADSL. The main problem is that BT in the ADSL market place faces no nationwide competition at this time, the people like the national wireless licence holders who could put real competitive pressure on BT are simply nowhere to be seen.

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