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Will UK broadband be more expensive in the future?

Today's ruling by Ofcom has allowed British Telecom to increase charges incurred by companies using the company's broadband network. Unbundled line costs will rise from £81.69 to £86.40 and more concerning for the U.K.'s broadband providers is the fact that Ofcom has already agreed that BT's Openreach division should be allowed to make a "fair return" on future broadband activities which will eventually include the nationwide fibre-optic network.

While the impact to the UK consumer may not be felt in the short term there is no doubt that broadband prices will increase in the short to medium term in order to accommodate the individual telephone line price rise. However, Virgin Media is one company which currently operates its own broadband network and is in discussions with other operators to lease capacity on its network. We may see something of a price war in the wholesale broadband market with Virgin Media looking to take on BT but whether Virgin Media has the capacity at the moment for significant line sharing remains to be seen.

UK broadband customers have experienced something of an "Indian summer" over the last few years with competition rife in the sector and prices moving sharply lower over the last couple of years. However, that may well be about to change!

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