Broadband News

Ofcom objects to BT Retails broadband pricing

  • Wednesday, September 1, 2004 12:41 PM

Back in the mists of time that was 2002 in the UK broadband marketplace, Freeserve lodged a complaint with Oftel about BT's residential broadband pricing. This investigation has gone backwards and forwards, and has now resulted in the current regulator Ofcom sending a statement of objections to BT over its residential broadband pricing.

Given the complaint was about BT Retail/Openworld possibly pricing itself too low, then the worry must be that this move may force up the price of BT Retails ADSL product ranges. Their pricing is certainly not the cheapest on the market, though that has not stopping around 40% of ADSL users connecting via BT Retail and BT Yahoo!.

For those wanting to read more, the Ofcom press release is available here. It would appear Ofcom has reached a decision that would appear to be in Wanadoo's favour, since "Ofcom proposes to make a decision that BT Group plc has infringed Section 18 of the Competition Act 1998 and Article 82 of the EC Treaty in relation to the company’s residential broadband pricing.". It is not clear what this means in plain English, but it could result in price increases for BTs retail products, and possibly a large fine for the BT group. The last few weeks have seen the regulator approve price rises on some of the wholesale products to ensure margins for competitors are attractive.

Hopefully more information will appear, but for now it looks very much like the pressure is on BT to reduce the market share it has in the retail ADSL sector, either by pricing itself out of the market, or simply withdrawing.


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