If British Telecom (BT) own the phone lines, how can other Internet companies provide cheaper rates when they need to rent the line from BT? Location: UK
In: Other
Companies can ‘rent’ lines from BT at bulk and/or wholesale prices. Also, regulatory bodies tend to prevent a monopoly.
It’s like buying a hammer. One might cost $9.99. A box of 200 might cost $3.99 ea, which then you could sell at $9.99 ea.
Because consumers often rent the line separately from the service.
Also the sellers are basically resellers. BT are cool with them selling it cheaper if they still make money.
BT is split up into different sections, which are supposed to run themselves independently. When BT want to provide a phone line etc to a customer, they have to “rent” the line from the part of the company which owns and maintains the lines, and a regulator tries to make sure that they don’t get preferential treatment, compared with Sky or Talk Talk or any other competitor. The regulator – and UK laws – have set up quite a detailed set of rules which mean that BT have to give a lot of access to their equipment and networks to the competitors, so that real competition can happen to benefit consumers.
This means that the competitors can set their pricing in the same way BT does, based on how much profit they need, any deals or combinations of services where the phone or broadband aspect can be part of an incentive to customers to buy their services, and so so.
Mergers and deals. The CEO of Telus (huge player in Canada) basically learned everything in the UK and merged a bunch of companies in his time there. That’s why you’ve got what you have now and we’ve got him here making 500M a year. He also buddied up with his friends from that time and they’re in Canada too. The UK was basically the training ground for Canada’s telecom monopoly.
BT (the part that will sell you a phone or broadband plan) do not own the lines. Those are owned by OpenReach. The latter is sufficiently independent from BT that they don’t provide BT with preferential rates.
An example more along the lines of your question is mobile phone operators (who do own their masts) being willing to let cheaper phone companies piggyback on their infrastructure.
A relevant point BT/EE is positioned as a premium brand – basically a brand that people are willing to pay more for .. so BT charge more than other providers. They have another brand they own called Plusnet which competes on Price with nowTV (Skys Budget brand) talktal and others.
At least in the US, the major phone providers were forced to sell access to their network to third-party resellers at a drastically reduced price compared to what they charged their own customers.
Because, as an infrastructure monopoly, the UK government created regulations that force them to so that the UK broadband market would be more competitive.
The prices Openreach Charge the ISPs for the access network portion are publicly available.
The ISP will also need to either have presense in the exchange or use a wholesale carrier to get the data back to their network + will have their own network costs so the price you pay will be a lot more than this.
[https://www.openreach.co.uk/orpg/home/products/pricing/loadProductPrices.do?data=Po3KnmqvCqPyVFu37aLXIdpyYOJW58IELJ3a1hFsXScqDWVqEbA2PDlT5Y2OhxKv](https://www.openreach.co.uk/orpg/home/products/pricing/loadProductPrices.do?data=Po3KnmqvCqPyVFu37aLXIdpyYOJW58IELJ3a1hFsXScqDWVqEbA2PDlT5Y2OhxKv)
[https://www.openreach.co.uk/cpportal/products/pricing](https://www.openreach.co.uk/cpportal/products/pricing)
Latest Answers