Home phone News

BT to offer cheaper phone deals after Ofcom deregulation

Wednesday 16 September, 2009

By Becca Talbot - becca@consumerchoices.co.uk

BT customers may benefit from cheaper phone and broadband bills following Ofcom’s decision to loosen restrictions placed on the communications giant.

Telecommunications regulator Ofcom yesterday removed restrictions placed on BT (www.bt.com) which prevented it from offering bundled services such as a landline and broadband in a discounted package.

The change means 14 million BT landline customers could benefit from more competitive telephone, broadband and digital TV packages.

Previously, Ofcom regulation meant BT was unable to offer discounts to customers who took more than one service, and were only able to sell bundles at a price equal to the sum of their parts.

BT Retail’s chief executive, Gavin Patterson, said: “It’s good news for consumers and businesses, as this will allow BT to offer more targeted discounts on products and services, and more attractive bundles at better prices.”

Ofcom’s decision to relax its constraints on BT, 25 years after it was privatised, was taken after the regulator deemed BT no longer has “significant market power” in the UK landline market.

However, while BT’s bundled packages may start to look more competitive, the company, which is still Britain’s largest landline provider, is increasing its call charges on 1 October 2009.

Ofcom said that other providers - including Virgin Media (www.virginmedia.com), Sky (www.sky.com) and TalkTalk (www.talktalk.co.uk) - now offer “effective competition” against BT.

“This is an important step in deregulating telecoms, where competition can be relied upon to serve the consumer interest,” said Ed Richards, chief executive of Ofcom. The regulator said more than 12 million households and small businesses in Britain now use a phone provider other than BT.

Simon Piper, business development manager at Homephonechoices.co.uk, said: “Ofcom’s ruling seems like good news for BT customers, but customers should be careful to examine all the features of a bundle, including call charges, to ensure they are getting the most suitable deal for them.”

He added: “It’ll be interesting to see how the different providers’ home phone and broadband bundles change in price once BT unveils its new packages and tariffs.”

Latest figures from Ofcom found that 46% of UK households bought a bundle of communication services in 2008, up from just 29% in 2005.

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