By Max Clarke

Rural broadband prices are to be slashed by 12% across the UK later this year, telecoms regulator Ofcom has today ruled.

The news follows a previous ruling by Ofcom to cut the price of BT’s wholesale internet service in a bid to foster competition between ISPs.

“It’s fantastic that Ofcom has moved to assist the growth of broadband provision in rural areas," said Simon Harper, head of marketing at Eclipse Internet. "Demand for reliable broadband services continues to be strong across the UK with rural areas in particular looking to get competitive connectivity."

Up to 3 million rural residents of the North and South West of England, along with parts of Scotland, Wales and Northern Ireland, are set to benefit from the price reduction. Vital services are increasingly dependent on the internet, and those living in remote areas of the country who cannot afford the higher broadband rates risk growing increasingly isolated.

“Businesses in rural or less densely populated areas can struggle to attain their full productivity potential when hampered by poor connections and slow speeds," continued Harper.

"With the increasing take up of web-based applications, rural broadband roll out is essential to ensure businesses in these areas have the tools to compete. We currently have many rural business customers using a Bonded DSL service that allows them to link several standard broadband lines together. This provides much faster upload and download speeds and an overall more reliable performance.”

Some 78% of UK households are now served by effective competition in mainly urban or densely populated areas, note Ofcom, following the continued success of LLU. This is an increase from around 69% of households in May 2008.