topic Re: Possible cost reductions from BT Wholesale in Plusnet Feedback

Possible cost reductions from BT Wholesale

Oldjim — Fri, 25 Sep 2009 17:10:30 GMT

http://www.ispreview.co.uk/story/2009/09/24/uk-isp-bt-to-double-24mbps-broadband-coverage-by-spring-2011.html

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UPDATE - 1:17pm
BT has just confirmed the above news and, most importantly of all, pledged to reduce WBC prices (one of the products they use to deliver ADSL2+) to ISPs from January 2010, with bandwidth charges being dropped by almost 50% and WBC rental costs standardised at the lowest current price.

http://www.ispreview.co.uk/story/2009/09/25/more-details-on-bt-wholesales-24mbps-wbc-price-cut-to-uk-broadband-isps.html

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BT said that bandwidth charges were to be dropped by almost 50% and that WBC rental costs would be standardised at the lowest current price (here). This accompanied a related announcement about plans to extend the reach of 24Mbps services to 75% of UK homes and businesses by the spring of 2011.
The Details:
* WBC bandwidth charges will reduce from £79.34 (excluding VAT) to £40.00 (excluding VAT) per Mbits/s per month.
* WBC rental is being standardised at £5.88 (excluding VAT) per line per month across the enlarged WBC footprint, a reduction from £7.66 (excluding VAT) in some areas.
BT believes that together these pricing changes will, for typical customers, result in an overall 14% WBC price reduction in Market 3 (WBC Geographic Tier A) and 29% WBC price reduction in Markets 2 and 1 (WBC Geographic Tiers C and E) on the exchanges in the enlarged WBC footprint by Spring 2011.
For those unfamiliar with some of that, there are 3 different categories for UK telephone exchanges and their coverage - Market 1, 2 and 3 (Hull is separate). These represent definitions of competition, thus Market 3 represents locations with a large amount of available competition from rival ISPs, while Market 1 may only be covered by BT.
Naturally Market 3 services are likely to be cheaper because of the added competition, which in turn is frequently the result of related areas being busy urban environments with plenty of people and opportunity. Some UK ISPs , such as PlusNet , already charge roughly £5 per month less for broadband services in Market 3 than those provided to 1 and 2. Most other ISPs prefer to split the cost evenly and offer a single standard package price to all.
UPDATE - 3:02pm
BT informs us that the reduction does not apply to the Managed version of its WBC product (WBMC).

P.S. - not sure this in the right place but since it mentions Plusnet and could affect their charges it seemed a good option

Re: Possible cost reductions from BT Wholesale

mentalist3d — Wed, 30 Sep 2009 11:22:28 GMT

Interesting read, but I doubt the savings will be passed onto the consumer (then again I can be very cynical), however, if it means better broadband speeds and access, I'll still willingly pay the same amount.

It will be like the energy companies, although they are buying cheaper energy the now, there is no point in passing on this saving to consumers, as they reckon the prices will increase again in the future, so if we keep the prices, as is, then when we do make a price increase in the future, that increase wont seem so much?!?

Re: Possible cost reductions from BT Wholesale

James — Wed, 30 Sep 2009 12:48:07 GMT

We use WMBC.

Re: Possible cost reductions from BT Wholesale

Oldjim — Wed, 30 Sep 2009 18:46:44 GMT

Not understanding the implications of WBC and WBMC I did a bit of digging and I am a bit surprised that Plusnet (as part of the BT retail family) wouldn't piggyback onto BT retail to reduce costs specially given the huge disparity in bandwidth charges with the latest reductions £40 (was £79.34) per Mbps per month on WBC against £107 per Mbps per month on WBMC
My first impression is that the enormous reduction is going to make the smaller ISP's even less competitive

Re: Possible cost reductions from BT Wholesale

James — Wed, 30 Sep 2009 22:27:17 GMT

You're probably right Jim.
Moving on to WBC for ourselves would cost a massive amount. We're using WMBC as an independent subsidiary of BT. We certainly didn't know of these price changes when we started our ADSL2+ implementation!