BT is being forced by industry regulator Ofcom to drop its wholesale price by 12% each year until 2014, meaning many rural broadband customers could see their bills lowered.
The price slash relates to the amount BT charges other ISPs like Sky, TalkTalk and O2 for using its network.
It’s hoped the move, which came into effect this week, will lead to stronger competition from those ISPs and therefore lower prices in those areas.
Ofcom estimates around three million homes and businesses could benefit from the move.
BT says the forced price drop won’t affect what it charges its customers.
However, the changes mean that BT’s rivals will pay less to use its network which could pave the way for more competition and lower prices.
The price cap will last up to 31 March 2014 at which time Ofcom is expected to look at the situation again.
Rural areas where BT is being forced to drop its wholesale price
• Scotland
• Northern Ireland
• Wales
• South-west England
• Cumbria
• North Yorkshire
• Norfolk