Competition in the UK’s broadband market has reached a significant milestone.
The number of unbundled lines – where rival communications providers such as Sky or Carphone Warehouse offers services over BT’s copper telephone network – has reached the 6 million mark.
The spur for the surge in unbundling was a set of legally-binding Undertakings that Ofcom agreed with BT Group plc in September 2005. These required BT to set up a new division, called Openreach, to provide services to rivals.
At the time there were just 123,000 unbundled lines in the UK and the majority of people could only get their broadband and landline telephone service from one provider – BT.
Today there are over 30 different companies offering unbundled services to homes and small businesses. This has helped to drive up broadband take-up and drive down fixed-line prices.
In September 2005, 37 per cent of households and small businesses had broadband; today the figure is 65 per cent.
Competition also means lower bills for consumers. According to Ofcom research consumers were paying on average £23.30 a month (excluding VAT) for a broadband service delivered over a copper phone line* in the last quarter of 2005. Today they are paying around £13.61 for the same service.
Ed Richards, Ofcom Chief Executive, said: “In just four years unbundling has gone from a flicker on the dial to a major competitive force in telecoms. This has delivered the dual benefits of driving up broadband take-up and driving down prices.”