Europe South Asia Asia Pacific Americas Middle East Africa BBC Homepage World Service Education



Front Page

World

UK

UK Politics

Business

Sci/Tech

Health

Education

Sport

Entertainment

Talking Point

In Depth

On Air

Archive
Feedback
Low Graphics
Help

Wednesday, November 10, 1999 Published at 13:06 GMT


Business: The Economy

BT cuts internet call costs

BT says it's good to talk: With prices cut, it may also be good to surf

BT has said it will "reduce dramatically" call charges for internet access in the UK from the middle of next month.

The move will see all internet service providers (ISPs) charged just under 1p a minute per call.

The idea is that the ISP - the company through which users gain access to the internet - bulk buys the call minutes from BT.

They would then be free to sell them on to customers, either through low call charges or via unmetered access for a fixed fee of about £10 per month.

Service provider AOL UK said it welcomed the fact that BT had recognised the cost of internet calls was currently too high.

But managing director Karen Thomson said the proposed cut was not a true flat-rate tariff.

"Consumers have been penalised for the time they spend online for long enough. It appears the clock will keep ticking, particularly for heavy users. This will force consumers to restrict their online behaviour, with potentially disastrous effects for the growth of e-commerce," she said.

The ISP market in the UK is dominated by subscription-free internet connections.

Instead of a subscription, users pay BT or another phone service provider for each minute they are online, generally charged as if it were a local phone call.

Huge demand for unmetered access

Because there is a metering of connection time, this has been seen as having a dampening effect on the growth of internet use.

By contrast, in the US most surfers pay a fixed rate per month for their connection and can then stay online for as long as they like at no extra cost.

BT, the former state monopoly, said it would give revised charging details to the industry regulator, Oftel, later this week and claimed it would invest more than £100m during the next two years to "optimise" internet usage.

There has been huge demand for unmetered calls for internet access in the UK from the public, campaign groups and politicians.

The UK government's e-minister, Patricia Hewitt, has recently added her voice to calls for unmetered access.

BT group managing director Bill Cockburn said: "BT is continuing to develop a range of internet access options which cater effectively for both heavy and infrequent users, ranging from individuals at home to major corporations."

Wide variety of charging

The new tariff will have to be approved by Oftel before anything is put in place and used by the ISPs.

The internet service providers have long called for flat-rate internet call charges across Europe, but BT's move appears to have thrown the ball back into the ISP's court.

Users would access services by a toll-free number and then be billed by their ISP.

There is a wide variety of call structures for ISPs in the UK - from those with monthly subscriptions and call charges to those promising no subscription and a toll-free phone number for connections.



Advanced options | Search tips




Back to top | BBC News Home | BBC Homepage | ©


The Economy Contents


Relevant Stories

18 Oct 99†|†UK Politics
Opinion: Abolish local call charges

02 Sep 99†|†The Company File
BT rings the changes

29 Jul 99†|†Sci/Tech
ADSL priced high for consumer

06 Jun 99†|†Sci/Tech
Net strike to bite in Europe





Internet Links


BT


The BBC is not responsible for the content of external internet sites.




In this section

Inquiry into energy provider loyalty

Brown considers IMF job

Chinese imports boost US trade gap

No longer Liffe as we know it

The growing threat of internet fraud

House passes US budget

Online share dealing triples

Rate fears as sales soar

Brown's bulging war-chest

Oil reaches nine-year high

UK unemployment falls again

Trade talks deadlocked

US inflation still subdued

Insolvent firms to get breathing space

Bank considered bigger rate rise

UK pay rising 'too fast'

Utilities face tough regulation

CBI's new chief named

US stocks hit highs after rate rise

US Fed raises rates

UK inflation creeps up

Row over the national shopping basket

Military airspace to be cut

TUC warns against following US

World growth accelerates

Union merger put in doubt

Japan's tentative economic recovery

EU fraud costs millions

CBI choice 'could wreck industrial relations'

WTO hails China deal

US business eyes Chinese market

Red tape task force

Websites and widgets

Guru predicts web surge

Malaysia's economy: The Sinatra Principle

Shell secures Iranian oil deal

Irish boom draws the Welsh

China deal to boost economy

US dream scenario continues

Japan's billion dollar spending spree