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Ofcom drops restrictions on BT pricing

by Scott Bicheno on 16 September 2009, 12:57

Tags: British Telecom (LON:BT.A), Ofcom

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It's good to bundle

Until today, the former UK telecommunications monopoly BT has had its ability to offer discounted bundles of telco services restricted by Ofcom, for fear it could abuse its dominant position.

Now, 25 years after BT was privatised, Ofcom has decided there is sufficient competition in the land-line phone market, especially through Virgin Media and BSkyB, and is allowing BT to charge what it wants.

Specifically, this will affect bundles, often given names like ‘triple play'. The categories of telco service on offer are typically:

  • Landline
  • Broadband
  • Premium TV
  • Mobile phone

A triple play bundle could offer any three of these at a cost lower than buying each one individually. A quad play bundle would, of course, include all four. Until now BT has been unable to offer a bundle for less than the sum of its components, although the table below seems to confuse that message.

While this is bad news for rival telco operators, for the same reason it's good news for consumers. BT will now be able to price its services more aggressively and the competition will have to respond. That should mean better value for the rest of us.

Ofcom's chief exec, Ed Richards said: "This is an important step in deregulating telecoms where competition can be relied upon to serve the consumer interest." BT shares are up five percent since the decision was announced.

Heres a table from Ofcom, summarising current bundle offerings:

 



HEXUS Forums :: 13 Comments

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ohh dear :S thats not good
Why? I can't see it but as a good thing.
barwell1992
ohh dear :S thats not good

Yeah not sure how you read this. This is brilliant news for the consumer. If you fear that BT will now bump its prices up then you have misread the article.

It means BT can now charge less for bunldes compared to when they had restrictions in place. To compete with SKY and Virgin BT can now lower bundle prices. Good news if you use BT for services like broadband, Telephone and BT.

Although I think BT were offering very cheap bundles to existing customers already if they threatened to move. I pay only 14 pounds for my option 3 bt boardband for example.
Tiscali is still cheap :D
Brewster0101
Although I think BT were offering very cheap bundles to existing customers already if they threatened to move. I pay only 14 pounds for my option 3 bt boardband for example.

Really….

/me starts stroking beard and cackling.

Last bill off them was quarterly bill from them was nearly 200 quid, I smell a phonecall and some haggling in my near future.