Consumers may not necessarily benefit from a proposal to reduce BT wholesale prices in rural areas, it has been claimed.
Last week, Ofcom said a price reduction of between 10.75 per cent and 14.75 per cent below inflation could encourage internet service providers (ISPs) using BT's network to invest in the countryside.
ISPs would theoretically be able to provide broadband deals at a lower cost in rural areas, but according to Timico Chief Technology Officer Trefor Davies, the move would not make much difference to their overall expenditure.
Writing in the company blog, he noted that consumer ISPs "already charge rock bottom prices" so a cut of 15 per cent off a low number "will not make much difference".
Mr Davies also explained that ISPs buy bulk backhaul bandwidth from BT Wholesale, and this is not specific to particular exchanges or locales.
"A big chunk of the cost is in the bandwidth used so whilst a reduction in line rental is good a reduction in bandwidth costs would be better," he said.
Tuesday 25 January 2011
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