BT call cost curbs to be scrappedOfcom considering lifting BT's price control

21 March 2006

BT could soon be able to decide how much to charge customers for phone calls and line rentals under proposals published by the UK telecoms regulator today.

Growing competition in the sector and falling prices has led Ofcom to look at scrapping the price controls which were introduced when BT was privatised 22 years ago.

More than ten million households now use telecoms firms other than BT for their phone calls, including more than four million on cable networks.

Mobile phones accounted for a third of all voice calls in the UK from July to September last year, while telecoms firms have been active in putting their own equipment in BT exchanges so households can use their services.

Ofcom also believes that the number of people who make calls over the internet - currently more than 500,000 - will snowball in the future. With more than ten million households having access to broadband, the regulator said these services should grow rapidly as they offer a cheaper option to traditional fixed-line calls.

Public consultation

Under the Ofcom proposals all phone companies would be free to set their own prices and compete for customers in future.

Stephen Carter, Chief Executive of Ofcom, said: 'More than 20 years on, sustained competition, informed customers and the rapid growth of new technology provide the necessary environment for substantial deregulation.'

Public consultation will now take place on the proposals, which are due to take effect from the start of August.