British Regulator Plans Measures to Increase Fiber Broadband Investment

By Adria Calatayud 
 

The U.K. communications regulator published Friday a set of draft measures aimed at increasing investment in fiber broadband networks, and eased its price-control proposal on how much BT Group PLC (BT.A.LN) should charge rival providers for using its physical infrastructure.

The Office of Communications, or Ofcom, said it would set a monthly cap for BT network division Openreach's basic superfast broadband service of 11.92 pounds ($16.6) by 2021. In March 2017, Ofcom had proposed setting that price at GBP11.23.

Shares in BT rose in early trade following the news and were up 3.3% at 0915 GMT, while TalkTalk Telecom Group PLC (TALK.LN) was up 2.7%.

The new rules will halve upfront costs of building ultrafast broadband networks, Ofcom said. BT's broadband infrastructure will be open to rival providers, which will reduce by half costs of laying fiber cables and accelerate installation, Ofcom said. Competing providers will invest in building their own networks only if this is more attractive than buying wholesale services from BT, the regulator said.

BT won't be allowed to cut prices in areas where rivals are starting to build new networks, Ofcom said.

The announcement by the regulator comes on the heels of a series of plans by U.K. broadband providers that would increase fiber coverage in the country to up to 20% by 2020 from 3%.

BT, Vodafone Group PLC (VOD.LN) in partnership with CityFibre Infrastructure Holdings PLC (CITY.LN), TalkTalk and KCOM Group PLC (KCOM.LN) are among those that have rolled out plans to deliver fiber connectivity.

Write to Adria Calatayud at [e-mail]

(END) Dow Jones Newswires

February 23, 2018 04:31 ET (09:31 GMT)

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