Ofcom today slashed the rental prices which BT is allowed to charge local loop unbundling (LLU) operators that offer services using the incumbent's network and exchanges.
The UK communications watchdog said that, after completing its review of the wholesale local access market which started in May this year, LLU operators will benefit from reductions of up to 60 per cent compared to current tariffs.
The adjustments, which the regulator said reflect "more recent cost data and minor changes to Ofcom's approach", will see reductions of 60 per cent for the transfer of an existing line.
Further reductions of 36 per cent have been made for the provision of a new line. For shared access, the connection and rental charges will be reduced by 70 per cent.
According to Ofcom, the move to reduce costs charged to providers that connect to consumers via BT's copper local loops will "increase effective and sustainable competition in broadband".
"Ofcom believes that development of the LLU market to allow operators to target infrastructure investment and develop scale in the creation of high-speed data services will be critical in ensuring a fully competitive and innovative telecoms market for the long term," the watchdog stated.
The announcement marks a bigger reduction in connection charges for fully unbundled lines than previously proposed in August.
Ofcom chief executive Stephen Carter said: "This year has seen lot of progress on LLU. This has been achieved through a combination of industry investment, regulatory review and, importantly, constructive engagement from BT."
The reductions follow previous consultations on 13 May and 26 August, and will come into effect from 1 January 2005.
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