TalkTalk takes issue with BT fibre broadband price

CEO Dido Harding wants Ofcom to intervene and promote fair competition.

TalkTalk has called on communications regulator Ofcom to look at some possible ways of reducing the broadband industry's wholesale costs, and promoting fairness between providers.

Speaking to the Guardian, TalkTalk CEO Dido Harding suggested that the £2.5billion fibre broadband network being built by Openreach - the telecoms giant's infrastructure division which sells access to other providers - could go to waste unless Ofcom steps in to promote competition.

At present, the amount BT charges its broadband rivals, including TalkTalk and Sky, to resell superfast fibre optic connections is almost double the price of wholesale line rental for BT's traditional copper telephone wires, which deliver slower broadband.

BT's ongoing fibre roll-out will aim to reach two-thirds of the UK by 2015, offering superfast broadband at speeds of up to 80Mb. Providers that have "unbundled" BT's telephone exchanges, installing their own equipment, pay a wholesale line rental charge to BT.

For the older copper wires the price is £7.28 per customer per month, while a fibre optic connection costs an extra £6.90 per month. Harding believes this gives BT an unfair advantage.

"The regulatory framework today is a little too skewed to driving investment and not enough to driving competition. We need to get a move on, otherwise the country will have spent a lot of money building infrastructure which no one is using."

"I think Britain's broadband vision needs to be more about people using broadband than macho claims about the speed of the technology," she added.

The Guardian also published BT's response, in which the company said at current prices it will take up to 14 years to recoup the £2.5billion investment.

"We believe our wholesale prices are very reasonable given how expensive it is to deploy fibre. We are taking a long-term approach and this is helping to keep prices down so that consumers will be encouraged to take up the service.

"Every [provider] pays the same for fibre and that helps sustain a competitive market," BT added.

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