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More freedom for BT Retail in retail telephony market
Thursday 20 July 2006 19:04:00 by Andrew Ferguson

Ofcom has for a number of years now regulated the price of things like the basic telephone line rental from BT, but now Ofcom believes with the amount of competition in the market that simple market forces can be relied on to avoid BT abusing its position in the area of line rental and call charges. Ofcom has created a set of web pages at which explains Ofcom's position.

The UK has something like ten million households using a phone company other than BT, and with the undertakings from the BT Group to treat all phone companies equally the ability for competitors to respond to any changes in pricing from BT is much improved. Of course relaxation of price controls does not guarantee price cuts, and as the basic line rental is currently priced below its true cost there is a chance that prices may rise.

If BT Retail was to increase the basic line rental, then it would seem likely that BT may sweeten the increase by reducing call charges. With the increasing number of inclusive call/line rental/broadband bundles from various quarters we may see BT now responding in a more robust fashion. For those currently on the BT Light User scheme or others who have special social needs, Ofcom is retaining the rules to protect these groups.


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