Contractors will not experience cost reductions to broadband prices immediately, according to an industry expert.

Ofcom has said that Openreach, BT's wholesale access division, will be able to charge communications providers for access to some of its main wholesale telecoms services.

This will lead to price reductions for both landline and broadband customers.

Richard Patterson, director of broadband comparison site BroadbandExpert.co.uk, said that the move is likely to encourage competition in the broadband market.

"Over recent years broadband prices have declined as competition has grown and it's likely that at least one of the main ISPs will take the initiative to be the first to cut costs," he explained.

However, warned Mr Patterson, cost reductions are spread over three years and so the effects will not necessarily be felt immediately by consumers.

In addition, competition is more likely to come from existing internet service providers rather than attracting new players to the market.