Ofcom is to force BT to drop the price it charges ISPs to use its network to offer broadband in rural areas, in a bid to improve services in these areas.

The regulator hopes that by forcing the telecommunications company to reduce the amount it charges by 11 percent below inflation, around three million homes and businesses in rural parts of Scotland, Wales and Northern Ireland as well as the South West of England, Norfolk, Yorkshire, Cumbria and Northumberland, will benefit consumers by offering cheaper and faster broadband.

The regulator said it expects the reduction in costs to "generate more competition between retail ISPs and to lead to cheaper retail prices which will benefit consumers".

Furthermore, Ofcom hopes the changes will also lead to better quality and faster services as they will enable ISPs to allocate more bandwidth per customer without increasing its costs.

However, ADSL 2+ technology that enables speeds of 'up to' 24Mbps over existing copper networks has been excluded from the forced charge reduction as Ofcom hopes this will encourage BT to roll it out in rural areas.

The change in charges will come into affect in mid-August this year and will run until March 2014.

Chris Marling from  Broadband Genie, said: "This should be fantastic news for rural broadband customers who have been ignored by both BT and Virgin Media, as well as rival operators, as they are not seen as profitable enough".

"In many instances rural customers are charged more for an 'up to' 8Mb service - that is often slower than 2Mb in reality - than people in urban areas are charged for an 'up to' 20Mb deal that will yield average results of 12Mb or higher."