Broadband News

Ofcom proposes migration price reduction.. BT jumps..

Ofcom has issues a consultation document following an investigation into broadband migration pricing which proposes that Ofcom should instruct BT to reduce its IPStream-to-DataStream migration charges to competing wholesale services from £50 to £11. Companies using DataStream have already complained over the varying fee they incur in comparison to the £35 migration charge currently applicable for IPStream-to-IPStream migrations.

This news will be welcomed by Tiscali, Thus, Telefonica and a few others who will have the most to benefit, as well as ISPs offering retail services based on these networks. The consultation document states "representations made by competing operators [Tiscali and Thus we presume] interested in relying on migration to accelerate the growth of their market share in the intermediate service market, that a migration charge in the range of £10 - 11 would make it commercially viable to use migration. Therefore, Ofcom considers that a £11 migration charge (as derived from efficiently incurred costs) is likely to significantly remove the existing barriers to migrating customers. This option would therefore satisfy the effective competition cost recovery principle."

On the same day, BT issued a statement about the reduction of all migration prices (both within IPStream services and between IPStream/DataStream services) to £11, effective May 1st.

"Today's price cut will introduce greater flexibility into the broadband market. The UK is already one of the most competitive broadband markets in the world and this move will make it even more competitive by making it easier for service providers to attract new customers.

These major price reductions reflect the cost savings brought about by the early stages of a BT Wholesale project to enhance our customers' experience by introducing further automation into the migrations process. The pricing changes reflect the changing nature of the UK broadband market and the fact that service providers are choosing to use a range of different wholesale products. As a result, BT is developing processes so that customers can migrate from one service to another whether it be from IPStream to DataStream or between different service providers. These processes will take time to implement and further announcements will be made over the coming months."

Bruce Stanford (Director of products), BT Wholesale

More information on the Ofcom consultation can be found here. [seb]


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