Full LLU line rental price drop in July
We covered complaints about the speed at which Ofcom was introducing price cuts on products that Openreach sells to providers earlier in May and Ofcom has today announced that Openreach has decided to reduce the rental cost of the full LLU (MPF SML1) service from 1st July 2017.
The announcement published by Ofcom reveals that the annual line rental for a fully unbundled line will drop to £84.38 + VAT per year from the current £85.29 and further cuts will take place over subsequent years once the three year charge control takes effect on 1st April 2018 with pricing sliding down to £82.28 per year eventually.
A saving of 7.6 pence per month is not much, but once aggregated across the around nine million full LLU lines in the UK that is £682,500 per month. The cut is too small to expect much in the way of changes in retail pricing, but it might help to reduce the pressure to increase prices as other costs such as core network bandwidth and support staff costs increase.
The reason this change has got the attention it has is because the existing charge controls expired in April 2017, and with a 12 month gap before the next set of price cuts became effective the LLU operators were keen to see if things could be speeded up. The push to reduce pricing has not finished though as it seems TalkTalk is keen for Ofcom to push ahead with the price cuts on the GEA-FTTC 40/10 service ahead of the expected April 2018 date.
Some may recall that there are actually two service levels Openreach offer to providers SML1 and SML2, with the higher service level costing £2.36+VAT more per year. LLU services generally used to use SML2 but almost all have now dropped to the cheaper SML1 standard. SML2 is designed to provide a one day repair with SML1 a two day repair. We doubt the public would agree whether a 20 pence a month saving is worth waiting an extra day for broadband to be repaired, hence the increasing pressure on Openreach to bring down fault repair times - or put another way, we want to pay you less but we also want you to work harder for us.