In a rather surprising move it has been revealed that Ofcom have no plans to introduce pricing restrictions regarding BT’s next-generation fibre-optic network. There had been speculation that Ofcom would severely limit the return on investment which British Telecom seeks from its new fibre-optic network which is about to be rolled out across the UK. So what is the reasoning behind the Ofcom stance?
Ofcom has suggested that current cheap broadband offers and the onset of mobile broadband will limit the price which BT is able to charge competitors for wholesale access to the network and the amount which it can charge end-users. While there is no doubt that cheap broadband offers from competing broadband providers have eaten into BT’s margins of late is there really a comparison between current broadband speeds and those which will be available via the BT fibre-optic network?
There is also a suggestion that mobile broadband will also help limit the return which BT can milk from the new network but there are reservations in some quarters as to whether this argument really stacks up. There is no doubt that mobile broadband is one of the growth sectors of the future but can it really compete with the infinitely faster broadband speeds which will be available via the fibre-optic network?