June 12, 2015 / 6:44 AM / 3 years ago

Watchdog proposes price controls for BT's high-speed business lines

LONDON (Reuters) - Britain’s telecoms regulator Ofcom has proposed controlling the prices BT can charge for some of its high-speed business lines, following up on a review which recognized the former state monopoly’s “significant” market power.

A man talks on his mobile telephone as he walks past a BT logo in London, February 5, 2015 . REUTERS/Suzanne Plunkett

Ofcom said it was opening a consultation on what price controls would apply to some of BT’s wholesale leased line prices, which could result in price cuts for customers in the 2 billion pound ($3.10 billion) market.

Business customers using the leased lines include consumer mobile and broadband operators as well as companies, schools, universities and libraries.

“Ofcom is proposing a form of charge control that aims to bring prices down to costs over a three-year period,” the regulator said in a statement on Friday. “This type of control, which is linked to inflation based on the consumer price index, provides an incentive for BT to make efficiency gains.”

BT said it believed there should be less regulation in the market and it would be presenting its views on the proposals to the regulator.

“Businesses already have a diverse and growing choice amongst a large number of providers. More regulation could discourage future investment in the UK’s telecoms infrastructure,” BT said in an emailed statement.

Ofcom said its consultation would close at the end of July and it expected to publish a decision in the first quarter of next year.

The consultation is also considering how to price the opening up of BT’s leased line business network to other operators, a move which it hopes will improve competition in the high-speed data link market.

Broadband companies TalkTalk, Sky, business telecoms providers COLT and GTC, and mobile operators Vodafone, 3 and EE, said last year they wanted the business lines opened up.

($1 = 0.6454 pounds)

Reporting by Sarah Young. Editing by Jane Merriman

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