Latest BT price cuts 'ignore low users': Watchdog says increase on basic services to be limited

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CHARGES for telephone calls to North America and many European countries will fall by up to 10 per cent under a new price package introduced by British Telecommunications. BT is also offering automatic discounts to all customers who spend more than pounds 50 a quarter but has made no changes in standard call charges for those who spend less.

Oftel, the industry watchdog, said that the changes had little effect on low users as they rarely made international calls. These users have already suffered more than most from an increase of 5.8 per cent in exchange line rentals, introduced in January, as rental constitutes a larger proportion of their bill, it said.

The price reductions come into effect in July, when BT also reduces prices for BT Chargecard users to North America. For July, there will be special rates on calls made at weekends to the United States and Canada.

The latest reductions mean that BT meets the requirement of keeping overall price increases for the year to inflation minus 6.25 percentage points. However, for typical residential customers, the total effect of this year's price changes is to increase bills by 2.3 per cent - 1.6 per cent below the increase in the retail price index.

Oftel has promised that consumers will benefit from significant price reductions in the year beginning 1 August. From August, the price increases for the year on BT's basket of basic services will be limited to 'RPI minus 7.5'. Oftel has also ruled that discounts for larger users and special packages will be ignored when calculating the overall price cut.

Don Cruickshank, Oftel's newly appointed director general, added that he is discussing a better scheme to help the less well off or those who need the telephone as a lifeline.

British Gas has been told to help customers cut their bills and to increase its overall standards of service. Ofgas, the industry watchdog, has told British Gas to have staff trained in energy efficiency at all shops selling appliances or anywhere where bills are paid. It has told the company to advise all disabled customers and those over 60 years old how to cut consumption, and to provide a continuously manned telephone advice service during business hours.