Regulator Ofcom has announced that it intends to cut the wholesale price that Openreach can charge telecom providers for broadband, a move that will likely lead to lower bills for households.

Openreach, which is owned by BT, owns the telephone cables that connect the vast majority of businesses and homes to the national broadband and telephone network.

In a statement on Friday, Ofcom said it wants to “provide incentives to invest in ultrafast networks, while promoting competition and protecting consumers from high prices”.

As a result of that, it said it intended to cut the price that Openreach charges for some of its broadband packages, from the current level of £88.80 per year to £52.77 in 2020-2021.

“We would expect much of this reduction to be passed through by retail providers to their customers, resulting in lower bills,” the regulator said.

It added that regulating the price would help BT’s rivals to compete for customers.

“Our proposals also provide an incentive for BT’s rivals to invest in their own ultrafast networks for the longer term.”

Hannah Maundrell, editor in chief of money saving advice site money.co.uk, described the move as “bold” and said she hoped it would enable households to have access to an “affordable, reliable, fast broadband connection and a choice of suppliers wherever they live”.

CityFibre, one of the UK’s biggest providers of wholesale fibre network infrastructure, described the move as a “major step forward”.

Ofcom also announced that it would be cracking down on Openreach to speed up services and repairs.

It said that in future, Openreach will be required to complete 93 per cent of fault repairs within one to two working days of being notified – compared with 80 per cent at the moment – and complete 97 per cent of repairs within no more than six or seven working days.

It also said it intends to ensure that Openreach provides an appointment for 90 per cent of new line installations within 10 working days of being notified, compared to 80 per cent within 12 days currently; and install 95 per cent of connections on the date agreed between Openreach and the telecoms provider, up from 90 per cent today.

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“Ofcom will monitor Openreach’s performance closely and step in if the required standards are not met,” it said.