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Thursday, 1 February, 2001, 08:16 GMT
Oftel keeps price grip on BT
sir ian vallance and sir peter bonfield of BT
BT chairman Sir Iain Vallance and BT chief executive Sir Peter Bonfield
In another blow for the beleagured telecoms giant British Telecom, the UK industry regulator Oftel has said it will continue with pricing controls on BT's residential calls for at least one year from August 2001.

BT had hoped that all formal controls on prices would be removed.

"Oftel will extend the existing price controls on BT's residential prices because BT continues to have market power in the provision of telephony services to residential customers," the regulator said in a statement.

It also said that the price controls needed to be retained to protect customers.

Increased competition

Although "as competition increases and prices fall, the case for retail price controls diminishes," it added.

The price controls, which will save consumers 270m ($394m) during one year, may even be extended from August 2002, the regulator said.

Some of BT's rivals have criticised Oftel for being too soft on the former monopoly, as the firm fights to preserve its share of an increasingly competitive marketplace.

The watchdog has been putting pressure on the telecoms operator to open up its local exchanges to rival networks thus allowing much of the UK's population access to high speed internet services.

BT has been widely accused of dragging its feet over so-called local loop unbundling.

In early trading Thursday BT shares fell 8.5p to 703.5p.

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18 Jan 01 | Business
Oftel speeds up urban broadband
18 Jan 01 | Business
Oftel calls industry summit
29 Dec 00 | Business
Oftel finalises charges
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