Telecoms regulator pledges to cut bills for consumer

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The telecoms regulator Oftel yesterday pledged to promote greater competition in the fixed-line telecoms market in an effort to cut consumers' telephone bills.

Oftel's new proposals would enable other telecoms providers to ensure their customers received one bill covering both line rental and call charges. Currently, customers who don't use BT get one bill for their calls and another from BT for line rental.

The regulator is proposing forcing BT to provide a cost-based wholesale line rental product to other companies on the same terms as BT's retail business.

The proposals could also lead to the abolition of existing price controls levied against BT. That price control, of RPI minus 4.5 per cent, was set in August 1997 and expires this July.

Ian El-Mokadem, the managing director of Centrica's telecoms arm, welcomed the move but said Oftel needed to make sure it came up with a comprehensive plan and implemented it quickly.

"It's the first time Oftel have acknowledged that resolving this issue of two bills is key to enabling competition," he said. "What we'd like to see is a rapid consultation process and a clear timetable."

Furthermore, he said it was crucial that the regulator monitored BT's call prices. "If BT were to suddenly drop their retail prices on the calls ... then players like us would be worse off, not better. Timing is everything," he said.

Oftel's consultation process finishes at the end of April after which it will make its recommendations. It said yesterday that a safeguard price control would be set to protect consumers while competition developed. That control would be dropped once competition had forced down prices.

David Edmonds, Oftel's director-general, said: "Consumers can be reassured that prices will not rise while competition increases, while BT can be certain that price regulation will disappear when consumers see the benefits of lower prices."

He promised that even when price controls were removed, measures would remain in place so the bills of the lowest spending customers would rise by no more than the rate of inflation.