Ofcom sets ceiling charge for a fully unbundled local loop
BT announced a drop in the annual cost of a fully unbundled line from £105.09 to £80 per year on the 1st August 2005. Ofcom has now announced that it is setting the maximum price that BT can charge, thus providing LLU operators with some measure of confidence that one of their fixed costs on each line will not suddenly jump in price. The figure set by Ofcom is £81.69 per year, and is detailed on the Ofcom website.
Combine this news with the previous LLU regulations released by Ofcom (see here) and you can see why the UK is seeing so many providers entering the LLU market. IPStream and DataStream pricing has dropping drastically since 2000, but LLU is now offering for those companies able to invest some capital the chance to further reduce costs, and also offer services that offer things that standard BT Wholesale fare do not. The regulations while not ruling out any future reduction in the price of BT Wholesale services, they do mean that BT will if the price of IPStream products was lowered, that LLU products will be reduced in cost also to ensure the current margin remains.