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BT Wholesale confirms May price changes
Monday 02 April 2007 19:19:53 by Andrew Ferguson

Broadband providers using BT Wholesale services should have now had confirmation of price changes to the products they use. We featured news on the proposed changes back in November 2006 ('BT Wholesale Price Changes' and 'More on BT Wholesale price cuts'). Details of the pricing that will come into effect at the wholesale level as of 1st May 2007:

IPStream product price changes

Product

Current Prices

May 2007 Prices

  Connection Monthly rental Cessation Connection Monthly rental Cessation
CBC Home 250 £40.00 £8.40 £0.00 £34.86 £7.63 £33.75
CBC Home 500 £40.00 £8.40 £0.00 £34.86 £7.63 £33.75
CBC Home 1000 £40.00 £8.40 £0.00 £34.86 £7.63 £33.75
CBC Home 2000 £40.00 £8.40 £0.00 £34.86 £7.63 £33.75
CBC Max £40.00 £8.40 £0.00 £34.86 £7.63 £33.75
CBC Office & Max Premium £40.00 £12.40 £0.00 £34.86 £11.63 £33.75
Standard Home 250 £40.00 £12.25 £0.00 £34.86 £11.76 £33.75
Standard Home 500 £40.00 £13.00 £0.00 £34.86 £12.51 £33.75
Standard Home 1000 £40.00 £23.00 £0.00 £34.86 £22.51 £33.75
Standard Home 2000 £40.00 £38.00 £0.00 £34.86 £37.51 £33.75
Standard Office 500 £40.00 £20.17 £0.00 £34.86 £19.68 £33.75
Standard Office 1000 £40.00 £32.14 £0.00 £34.86 £31.65 £33.75
Standard Office 2000 £40.00 £56.07 £0.00 £34.86 £55.58 £33.75
All pricing excludes VAT

These prices do not include the rebates available for Tier 1 exchanges which number 1016 exchanges in total. The rebate scheme replaces the previous rebate of £1.10 or £1.40 on the busiest 561 exchanges with a monthly rebate of £1.24 across 1016 exchanges.

The CBC products stand for Capacity Based Charging and a key factor of the price changes was to rebalance the pricing for CBC based BT Centrals. The impact analysis of this from November 2006 is worth a read to see what the expected impact of the price changes will be. The prices for the BT Central components, that the broadband provider must rent to link its own network to that of BT Wholesale, are listed below:

Capacity Based Pricing IPstream BT Central costs

Product

Current Prices

May 2007 Prices

  Connection Annual rental Connection Annual rental
2Mbps £3,000 £12,360 £3,000 £11,520
10Mbps £14,000 £35,244 £14,000 £30,720
34Mbps £14,000 £81,000 £14,000 £66,000
155Mbps £50,000 £347,400 £50,000 £271,800
155Mbps L2TP £50,000 £316,200 £50,000 £248,400
622Mbps LT2P £175,000 £1,496,760 £175,000 £1,162,600
622Mbps LT2P (set at 155Mbps) n/a £373,560 n/a £290,200
622Mbps LT2P (set at 310Mbps) n/a £747,240 n/a £580,400
622Mbps LT2P (set at 465Mbps) n/a £1,120,800 n/a £1,279,560
Central Plus (100Mbps Access) £15,000 £240,000 £15,000 £180,000
Central Plus (100Mbps Internet) £15,000 £55,500 £15,000 £55,500
Central Plus Static IP £24,000 £48,000 £24,000 £48,000

A key change not reflected by the table above is that with a CBC based BT Central, a fee of £0.63 per month will be charged per End-user as a bandwidth rental fee. This adds up to a total of £7.56 per year, so a Central with 30,000 end-users on it would have an additional charge of £226,800.

The only providers we are aware of using BT Central Plus products are BT Retail (Plusnet now owned by BT is using Central Plus in a small trial also), and they must purchase both an Access and Internet component. An ISP can reduce its costs by having fewer Internet components than it has Access components. This is useful when the interconnect options of BT Central Plus are used to host content servers which do not need Internet access.

The biggest change is the introduction of the cessation charge which reflects what BT Wholesale is charged by BT Openreach when an ADSL connection is ceased. This charge will normally only be raised to the broadband provider when broadband is no longer required on a line, or when moving home. Additionally, in cases where broadband was automatically ceased due to name changes on the phone bill, the charge may be raised. If you are remaining in your home and changing provider you can avoid the cessation charge by making use of the MAC code migration process to change providers. BT Wholesale indicates that the reduction in connection charge should offset the costs to service providers, but only time will tell whether providers decide to absorb this fee or pass it on to the end-user.

These price changes mean there is potential for providers to drop their retail prices by a pound or two a month. Alternatively it gives the provider an opportunity to invest in new capacity by keeping its retail prices relatively fixed and thus start to add capacity for the expected increases in average usage during 2007.

Comments

Posted by _TRIaXOR_ over 10 years ago
and for 2007 BT milks the broadband cow >:(
Posted by kamelion over 10 years ago
It's better than 2006. It will be interesting to see whether ISPs pass on the savings to end users, either in lower prices or increased bandwidth provision.
Posted by CARPETBURN over 10 years ago
Lmao had a mini arguement in the forums with a user that BTs new rates would not make a blind bit of difference to prices we currently pay or make a blind bit of difference to overpriced small cap monthly packages. Well here is the proof (not that it were needed). So glad my broadband wont be through BT in a few weeks... I say again people... LLU and Cable services are the future... BT the cash cow is living in the past and need to take their heads out of the sand.
Posted by herdwick over 10 years ago
Cable is irrelevant to 55% of the population and LLU is not available on 80-90% of telephone exchanges so to say they are "the future" is for many end users a triumph of hope over reality.

Cable is premium priced to the end user and it remains to be seen what the price / sustainability / usage limits of LLU evolves into once it gets out of its loss making growth phase. Time will tell.
Posted by CARPETBURN over 10 years ago
That 55% POPULATION figure for cable is a little inaccurate, see http://www.digitalspy.co.uk/cable/local/ apart from wales and scotland the virgin network now covers a very large part of the POPULATED UK and is always increasing. LLU and adsl2+ is still pretty new but again is increasing all the time, carphone warehouse have 1376 planned LLU upgrades, Bethere have another 198 planned in addition to the 635 they already have, easynet have 929 already, theres only 5561 exchanges in the UK which have ADSL enabled, so by my maths your 80%-90% of homes not able to have a LLU service is a bit wrong.
Posted by andrew (Favicon staff member) over 10 years ago
Actually I must correct CarpetBurn, the maps at Digital Spy are part of the story, as there are smaller areas inside the mapped zones where cable is not available. Those maps just show which provider held the cable franchise for an area NOT where it was available.

Virgin Media is on the record as its network passing around 45% of UK households.

On LLU remember that some exchanges have multiple LLU providers, and the highest coverage is around 70% of households on around 1000 exchanges. So Herdwick was correct, since 1000 exchanges is roughly 20% of the 5600 exchanges in the UK
Posted by CARPETBURN over 10 years ago
Then I freely Andrew stand corrected about the figures regarding the amount of cable and LLU areas.
My original post and MAIN point that i made stating BTs new rates will not make a blind bit of difference to prices we currently pay or make a blind bit of difference to overpriced small cap monthly packages. I feel given the very small decrease in BTs prices still stands. Obviously it will remain to be seen, but it looks to me like BT will still be milking people and providers, and if you have LLU or Cable those in both terms of speed and price are still the best options.
Posted by andrew (Favicon staff member) over 10 years ago
Allowance in 2006 5.5GB, with new prices provider could if all other costs remain equal now give 8.2GB, and in 2008 with the proposed pricing give between 11GB and 16GB.

The price cuts look small but once properly evaluated do allow for some changes to usage allowances.
Posted by CARPETBURN over 10 years ago
To be fair 11Gig is still a very small allowance, I and others could do that in a week easy at lovefilm or itunes.
Posted by Oldjim over 10 years ago
How about rechecking the prices for Office Max and Max Premium in the IPstream table
Posted by Dawn_Falcon over 10 years ago
Andrew, IF and only if they charge users for termination, of course. Which means the actual charge to the end user (you can count on £45-50 for that) will be higher, especially since some ISP's will charge that as part of the connection fee.
Posted by herdwick over 10 years ago
Try reading before posting, Carpetburn. Less than 20% of the exchanges in the UK have any form of LLU, so 80-90% of exchanges do not have LLU. Note *exchanges* not houses. 45% of UK with cable broadband available is an OFCOM statistic from memory. It's certainly less than 50%.
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