News on 29 August 2000

Telecommunications regulator Oftel is proposing to regulate BT's wholesale leased lines in an effort to increase competition and reduce prices.

Oftel's review of the retail market found that competition was not effective, resulting in higher prices. The regulator's proposals, set out in a consultation document published yesterday, include targeted price control of the wholesale leased lines to be provided by BT.

David Edmonds, Director General of Telecommunications said: " Currently UK prices for leased lines are in line with average European prices but are much higher than those in the cheapest countries and in the US. Greater competition in the leased lines market will mean a better deal for UK consumers.

"I believe that my proposals will significantly increase competition in the market and result in more competitive prices…[targeted price regulation] will ensure that other operators can purchase wholesale leased lines at prices which will enable them to compete effectively."

National leased lines offer permanently connected communications links between sites. They constitute a significant market of approximately £1.4 bn (1998/99). The retail service is purchased by many UK business consumers and leased lines are also purchased as a wholesale service to enable operators and service providers to offer other telecoms services, such as fixed link internet access.