Broadband in rural areas may get cheaper if Ofcoms proposal which it recently submitted to BT wholesale is agreed upon. Broadband is supplied by local operators but like any other business they are just distributors or franchisees of the main company. They buy broadband from a main company and supply it to different homes in UK.
And the most dominant wholesale supplier in rural areas right now is BT Wholesale who is currently supplying to numerous operators which in turn are supplying broadband to a population equivalent to almost 12 percent of the UK population. This means that BT Wholesale is supplying broadband to more than three million homes and businesses.
And in the rest of the 85 percent which is usually the urban population there are two or three more wholesale providers with the major competitor to BT being Virgin Media. Virgin recently announced its upgrade to a 30Mb broadband and it uses the cable network technology unlike BT's VDSL technology.
But now the price reduction may mainly be due to the new proposal Ofcom has placed for BT. The new proposal tell BT to reduce prices between 10.75% and 14.75% below inflation. This will not only benefit the consumers but will also be good for BT in the long run. The increasing competition is not only from big players like Virgin Media and other such names but also from local operators. These local operators are installing their own equipment which allows them to distribute broadband at much faster and cheaper rates than usual.
With the new proposal Ofcom plans to bridge the gap between the rates charged in urban and rural areas. They believe that the local operators (Internet Service Providers) after the price reduction will be able to invest much more in order to increase their broadband capacity and provide better and faster broadband to their customers.
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