Oftel orders BT to cut prices

Telecoms watchdogs have told British Telecom to cut charges to firms using its equipment to provide rival broadband services.

The ultimatum comes after watchdogs admitted to concerns over the slow roll-out of high speed internet networks.

Oftel chiefs have ordered BT to allow competitors cheaper access to parts of its telecoms infrastructure, which the firm inherited when it was privatised and which has given it a near monopoly in providing broadband services.

"We believe BT's proposed charges are too high," Oftel director general David Edmonds said.

Oftel, under pressure from smaller telecoms firms, has also forced BT to allow rival companies to install broadband equipment throughout its exchanges.

Access concerns

The announcement follows BT's admission earlier this week that it is thinking of raising customer charges for broadband services, which allow surfers high-speed internet access.

It also comes amid widespread and growing concerns over the slow roll-out of broadband in the UK, worries which have prompted criticism of Oftel by officials from the government and the European Commission.

Freeserve, a rival to BT in providing broadband services, has responded cautiously to the news that BT will have to cut charges.

The company released a statement saying that it would reserve judgement until it had seen BT's new wholesale pricing structure.

It also complained that BT had made broadband services prohibitively expensive for a mass consumer take-up.

While the UK boasts more than 16 million surfers, BT is thought to have signed up just 35,000 users to its high-speed ASDL (asymmetric digital subscriber line).

However, other Britons do have fast internet access through cable TV packages.

Disappointing take-up

Mr Edmonds admitted that despite "hard work" by Oftel, BT and the industry, the number of exchanges where rival firms had installed equipment was "less than originally forecast".

"The main reason for this is less demand from operators than forecast," Mr Edmonds said, blaming the slowdown in economic growth for the slack take-up.

He also committed Oftel to taking "all appropriate action" to ensure BT complies with legal commitments over the reforms.

In the City, BT shares stood 3p higher at 413p in afternoon trade.