Thursday, May 2, 2013

Are BT's Broadband Access Rates Too Low?

TalkTalk Group in the United Kingdom has complained to Ofcom, the U.K. communications regulator, about prices BT charges for its broadband access products.

Specifically, TalkTalk Group thinks BT Infinity retail prices are too low. Yes, too low. The problem, as TalkTalk sees matters, is that very low BT Infinity prices are so low that TalkTalk has little room to buy wholesale capacity from Openreach and sell at retail against the BT pricing umbrella.

In other words, BT is engaging in predatory pricing intended to damage its competitors, TalkTalk alleges. 

Ofcom has opned a proceeding to consider the charges. A 2010 comparison of "superfastservices in a number of countries (it always is difficult to compare prices in terms of local purchasing power, or percentage of household income, across nations) might not suggest U.K. prices are so low. 

The issue is that BT cannot price in a predatory manner, as a dominant provider in the U.K. market. 


   Broadband Service Speed and Price (High Tier)
Country
Downstream
Upstream
Price
Canada[3]
25
7
$67
Denmark[4]
40
2
$72
Finland[5]
24            
1
$67
Hong Kong[6]
100
Unlisted
$38
Japan[7]
200
100
$60
South Korea[8]
100
Unlisted
$29
Sweden[9]
100
100
$46
Taiwan[10]
100
5
$37
U.K.[11]
50
Unlisted
$57
United States[12]
50
20
$145

No comments:

What Declining Industry Can Afford to Alienate Half its Customers?

Some people believe the new trend of major U.S. newspapers declining to make endorsements in presidential races is an abdication of their “p...