Thus complains to Oftel over BT ADSL ‘margin squeeze’

Thus - the alternative telco best known for its Demon Internet brand - has joined the chorus of critics opposing BT's decision to cut the cost of some of its wholesale ADSL services.

It is calling on telecoms regulator Oftel,to investigate the "margin squeeze" created by BT, following the dominant telco's new broadband pricing strategy.

In a complaint echoing similar concerns raised by rival ISP Tiscali UK, Thus argues that the cuts favour BT and disadvantage other operators which make use of alternative, rival networks.

It claims the move will harm the competitive landscape and ultimately lead to poorer and more expensive services for customers and business users.

BT's cost changes announced yesterday relate only to 'IPStream' connections - the wholesale end-to-end service provided by BT Wholesale to BT's retail operations and other service providers.

However, Thus points out that BT has failed to pass on similar price advantages to its Datastream service - a service that allows other service providers to use their own networks to provide competitive broadband services, as opposed to relying solely on the "inflexible services" provided by BT Wholesale.

Tiscali UK described this move as "anti-competitive". Thus adds that those involved in local loop unbundling will be at a "significant disadvantage as they see their investment devalued".

Said Thus COO Phil Male in a statement: "A significant reduction in the wholesale cost of IPStream without a corresponding reduction in the wholesale cost of the Datastream service will discourage innovation and competition in the market for broadband services.

"Time and again BT has only reduced its prices when forced to by competition. If there are no competitive pressures in the market, a dominant operator can use the opportunity to set artificially high price points.

"Consumers, both business and residential, will ultimately pay the price." ®

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