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BT Responds to WLR

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12/16/2005
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LONDON -- BT today responded to Ofcom’s assessment that Wholesale Line Rental (WLR) is “fit-for-purpose”.

WLR allows alternative telecoms providers to rent access lines on wholesale commercial terms from BT and resell the lines to customers. This market has been a key part of Ofcom’s recently-completed Strategic Review of the Telecoms Sector and the industry has agreed that this market should be further promoted to encourage even more competition. There are currently over 300 WLR operators in the market and nearly two million WLR lines.

Ofcom believes that, to compete effectively, telecoms companies need a clear margin between the wholesale price they pay to rent a telephone line from BT and the price BT charges their retail customers for line rental. Therefore, to further stimulate competition in the market and as part of the regulatory settlement agreed with Ofcom, BT has been promoting investment in WLR by reducing the price for WLR operators from £9.24 to £8.74 per month (this became effective 1 Aug). Ofcom has also published proposals to introduce further price reductions.

Also to increase this margin for WLR operators, BT announced on June 23* that it would increase the line rental charged by its retail arm. From 1 January 2006, the line rental for BT Together Option 1 customers will increase by 50p, from £10.50 to £11.00 a month.** For other packages, such as BT Together Options 2 and 3, the line rental remains unchanged. BT customers will be notified in writing with their next telephone bill.

Gaby Heppner-Logan, BT’s Director of Regulatory Affairs, said: “The UK has one of the most competitive telecoms markets in the world, with dozens of companies offering calls-only packages and several WLR providers already offering both calls and lines on a single bill. Ofcom’s announcement and our own announcement today boosts the telecoms market even further by encouraging more companies to invest in WLR, giving them another attractive route to market and, ultimately, giving customers an even greater choice of supplier”.

Gavin Patterson, Managing Director, BT Consumer added: “BT is still way out ahead on overall value. BT has saved UK consumers £1.1 billion since 1995 by cutting prices and customers now enjoy the lowest call prices in the G7 countries.*** For example, a 30 minute call ten years ago that cost £1.50 is now 5.5p for an Option 1 customer. And BT uniquely offers innovation like BT Privacy – which has now blocked no less than 150 million unwanted sales calls”.

Patterson added: “BT is going to give more than this 50 pence back to our customers in the shape of money-saving initiatives such as our new Friends and Family Auto-Update. 3.5 million customers could save more than £12 a year by signing up, twice the amount represented by this line rental increase, and over half a million could save £36. Customers will also benefit from other offers we will introduce in the New Year.

BT Group plc

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