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Regulator limits BT wholesale network charges

£100m-a-year savings, maybe

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Communications watchdog Ofcom has published details of controls that will be placed on BT’s wholesale network charges for narrowband products from 1 October for the next four years.

It hopes the cost of making telephone calls and dial-up internet connections will fall, as the price charged by BT to other service providers for carrying calls between exchanges is reduced.

The regulator estimates that the controls, together with competition, could reduce telecommunications costs for UK businesses and consumers by around £350m - £400m over the four years.

Ofcom is also replacing BT's charge control for carrying traffic between local and main exchanges (local-tandem conveyance) with a ‘safeguard cap’ that will limit charge increases for that service to below inflation. This change recognises the continuing growth of competition in this market, says Ofcom

In addition, the regulator found that certain areas of the wholesale narrowband market, where BT no longer has significant market power, could now be deregulated.

See: Ofcom’s explanatory statement and notification of decision.

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