BT Wholesale is to cut the prices independent service-providers pay for broadband lines in a move that seems certain to reduce the cost of access for end users.

The move will help independent service providers (ISPs) who package and resell BT Wholesale services to compete with companies that have installed their own equipment in exchanges under the Local Loop Unbundling (LLU) scheme.

BT agreed with regulator Ofcom not to change its wholesale prices until 1.5million LLU lines have been installed, to give the new system a chance to grow. This threshold is expected to be passed in May.

The company announced today that it will then cut cost of a line for ISPs, by nine per cent from £8.40 to £7.63 a month under the BT IPstream deal used by most ISPs. Increased rebates at busy exchanges, where per-customer costs are lower, will push the savings up to 12.5 per cent.

Connection charges will also be cut, from £40 to £34.86 ex-Vat. But service providers will face a new £33.75 (ex-Vat) charge for cutting off a line unless they subscribe to the so-called MAC process, which is intended to make it easier for customers to switch providers.

BT hopes the charge will encourage ISPs to use the MAC system. A spokeswoman said service-providers have only just heard about the price cuts and that it is too early to predict the effect on end-user bills.

BT also announced that it is to start trialling its next-generation ADSL2+ service, called Wholesale Broadband Connect, next summer. The service, which uses BT's all-IP 21st Century Network (21CN), will offer speeds of up to 24Mbits/sec.