The decision by the UK watchdog Ofcom is in recognition of the highly competitive UK marketplace, and the fact that there is now more than enough competition to ensure that BT’s prices remain competitive.
Ofcom’s decision is good news for customers, said Ian Livingston, CEO of BT Retail. The UK has enjoyed one of the most competitive telecoms market in the world for a number of years and a freer BT will deliver even better value and innovation for our residential customers. We will now look at how we can simplify our pricing structures and make them more user-friendly.
The decision, which takes effect from August 1, means that BT will be able to set new pricing structures, although it has agreed to restrict increases in basic line rental, protecting those customers for whom this is a large part of their phone bill. The existing BT line rental charge is 10.99 pounds ($20.19) per month.
BT is competing in a market awash with competing call plans and converged service offerings, including free broadband connections from the likes of the Carphone Warehouse Plc and British Sky Broadcasting Group Plc.
Ofcom estimates that roughly 10.7 million households in the UK no longer use BT as their phone provider. This, coupled with the move to mobile phones and VoIP for cheap international calls, means BT has been facing intense pressure on its fixed-line margins for many years.
