BT to be allowed to raise prices it charges rivals

BT could soon be allowed to charge other telecoms operators up to 11pc more for using its network under plans announced by the communications watchdog Ofcom.

But the telecoms giant said the proposed price rises are still too low and will prevent it from achieving a fair return on its infrastructure investments.

The regulator said it would allow BT's Openreach division to increase annual rates on unbundled lines, where an operator take control of BT's network to provide broadband and phone services, from £81.69 to £91 from April 1 2009.

Other packages, including shared unbundled lines, where rivals share lines providing broadband only, and residential wholesale line rental, are set to increase by a maximum of 4pc – to £16.20 and £104.40 respectively. Business wholesale prices are set to remain capped at this year's level of £110.

"The changes are designed to promote continued competition in the provision of voice and broadband services and to ensure that Openreach has the appropriate incentives to invest in delivering services to its customers," Ofcom said in a statement.

The proposals are set to boost BT's net income by about £20-30m a year, but fall short of the company's expectations. A BT spokesman said prices have not been raised in more four years and that the proposed increases do not even cover inflation.

BT Openreach chief executive Steve Robertson said: "BT invests more than anyone in the UK's communications infrastructure and so it is critical that it is able to achieve a fair rate of return on its investment."

Source: The Telegraph, 5th December, 2008

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