As the shackles are taken off BT broadband wholesale charges there is some debate as to whether we will see a substantial price hike in broadband subscriptions in the short to medium term. A number of surveys of late have suggested the fact that BT will be allowed to increase connection charges to rivals from £81.69 to £91 in April 2009 and £111 in 2012 does not bode well for “cheap broadband offers”.
While there is little sign at the moment, some experts in the broadband market are suggesting that prices could rise substantially in the short to medium term as ISPs are forced to pass on wholesale broadband price increases and also bring their business models more into line with the difficult economic situation. There is no doubt that many broadband providers in the UK have been offering subsidised pricing arrangements as a way to attract customers for the medium to longer term which has forced down the general price of broadband subscriptions in the UK.
If we do see a significant price hike in broadband subscription charges it will be interesting to see how the industry regulator Ofcom tackles the situation as the UK government seems determined to roll out broadband to all areas of the country at a price that people can afford.