Countryside to get faster, cheaper broadband
Millions of people living in rural parts of the UK could soon enjoy faster, cheaper broadband after Ofcom decided to significantly reduce the prices that BT can charge internet providers in less-densely populated areas.
It is hoped the move will narrow the difference between prices that consumers in rural and urban areas paying for the service.
The telecoms regulator announced that there would be a 12% price reduction below inflation per year to BT wholesale prices.
Better deals for customers
Ofcom says it expects these cuts to increase the number of internet providers offering services in the countryside, effectively leading to better deals for consumers. It also hopes the move will lead to faster broadband services as internet providers will be able to allocate more bandwidth per customer.
Around three million homes and businesses are set to benefit from the decision. These are mostly in rural areas, including parts of Scotland, Wales and Northern Ireland, as well as the south west of England, Norfolk, Yorkshire, Cumbria and Northumberland.
Ernest Doku, technology expert at uSwitch.com, says: "This move could wipe out the postcode lottery that has seen rural householders treated as second-class broadband citizens. It has the potential to ultimately cut the costs of the bills of those living in rural areas.
"By increasing competition, Ofcom is making sure that consumers will end up the real winners as they will now have a greater choice of providers. This means the internet service providers can look to offer the best deals possible to win new customers over and, now that they can access BT's infrastructure at a lower cost, it could only be a matter of time until they pass these savings on."
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An increase in the general level of prices that persists over a period of time. The inflation rate is a measure of the average change over a period, usually 12 months. If inflation is up 4%, this means the price of products and services is 4% higher than a year earlier, requiring we spend and extra 4% to buy the same things we bought 12 months ago and that any savings and investments must generate 4% (after any taxes) to keep pace with inflation. Since 2003, the Bank of England has used the consumer prices index (CPI) as its official measure of inflation (see also retail prices index).