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15|12|05

Wholesale Line Rental to deliver greater competition and choice

Ofcom today confirmed that after two years of development the Wholesale Line Rental (WLR) product offered by BT Group plc meets a series of agreed product criteria, subject to specific conditions. WLR is used by competitors to BT Group plc to offer customers a single bill for line rental as well as voice calls.

Ofcom has assessed the WLR product against a series of requirements first agreed with telecoms companies in 2003 covering service standards, functionality and market impact.

Ofcom's analysis shows that the WLR product now meets almost all of these requirements. There are now nearly 2 million WLR lines in the market, and take-up continues to grow with more than 130,000 new orders every month. BT Group plc has given written commitments to resolve the small number of outstanding issues as part of system upgrades later this month and in April 2006.

As a result of this assessment, Ofcom is relaxing the current retail price controls on BT Group plc from today. This is in line with prior commitments from 2003.

Greater certainty for competitors, more choice for consumers

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 that they charge their retail customers for line rental.

Increasing this margin will mean greater competition in the calls and line rental market, expanding consumer choice and increasing value for consumers as more providers compete for their custom.

To deliver an increased margin, Ofcom has consulted on proposals to cut WLR prices by a further 9% for residential WLR and by 8% for business WLR. Ofcom will publish final conclusions in the New Year.

The margin will also be increased as a consequence of price changes previously announced by BT Group plc in June this year. BT is raising its retail charges for line rental (including VAT) by 50 pence per calendar month (See Note 1). This change has been confirmed in a separate announcement by BT today and will take effect from January 2006.

Openreach

The WLR product (currently offered by BT Wholesale) will be offered to providers by the new BT Group plc business unit, Openreach, from 22 January 2006.

As part of BT Group plc’s voluntary Undertakings, Openreach is committed to delivering further improvements on the WLR product by mid-2007. These developments will give BT Group plc’s competitors access to a WLR product which is exactly equivalent to the product available to BT Group plc’s retail businesses.

Ends.

NOTES FOR EDITORS AND CSEs

1. BT Group plc announced on 23 June 2005 that it had voluntarily offered Undertakings to Ofcom in lieu of a reference under the Enterprise Act. See BT Group plc news release at: http://www.btplc.com/News/Articles/Showarticle.cfm?ArticleID=e89ed523-12a0-45a1-bc2b-321f127e83be
2. Ofcom is the independent regulator and competition authority for the UK communications industries, with responsibilities across television, radio, telecommunications and wireless communications services.

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