Openreach to cut price of fast broadband

Openreach, the firm that runs much of the UK's telecoms infrastructure, has reduced the wholesale price of broadband in an attempt to boost the number of homes and businesses using fast services.

For firms such as Sky and TalkTalk it means the cost of using the network will be reduced if they can increase the number of customers on it.

Openreach hopes "the vast majority" of Britain's homes will have superfast broadband within five years.

Experts welcomed the move.

Clive Selly, chief executive of Openreach said: "This offer is a win/win for communications providers, their customers and Openreach. It will help Britain's homes and businesses experience the benefits of faster and more reliable broadband."

So far 10 million households and businesses have upgraded to superfast broadband (speeds of 24 megabits per second and above) but Ofcom estimates that four million homes could make the upgrade for the same price or less.

Matthew Howett, founder of research firm Assembly, said the announcement made "commercial sense" because Openreach and others looking to upgrade the UK's infrastructure needed to prove that the demand is out there.

"This does seem like a genuine move to get more people onto the fibre network, and stave off criticism from those that say the UK falls behind," he said.

"It's about Openreach showing the industry and the regulator that it has changed and is implementing the further separation from BT not only to the letter, but also in the spirit of what was agreed."

Richard Neudegg, head of regulation at price comparison site uSwitch said: "Today's news means that there is an increased incentive on providers - who have no obligation to pass these cuts on to customers - to encourage more of the four million standard broadband out-of-contract customers to jump across to superfast services."

"Superfast broadband is often cheaper for customers to upgrade to when they are out of contract and on standard broadband services - in fact broadband customers are currently spending £222m annually to stay on slower speeds."

Tristia Harrison, chief executive of TalkTalk said: "We have long argued that lower wholesale prices are essential to driving higher fibre take-up, which leads to happier, more loyal customers."

"Importantly the agreement should support alternative network investment, including our plans to build a full fibre network to over three million homes and businesses."

The news comes as Ofcom announced more detail about how it plans to open up the UK's broadband market.

It includes offering companies greater flexibility to use Openreach's telegraph poles and underground ducts to lay fibre networks.

The UK government wants to see all of the UK on full-fibre broadband - rather than rely on broadband delivered over copper networks - by 2033.