Ref: 13/00
Date: 9 March 2000

Due to increasing competition in certain international markets, the Director General of Telecommunications today announced his decision to reduce regulation in these areas. This is in line with Oftel's strategy of reducing regulation as markets become competitive.

Competition in international routes has grown substantially since full liberalisation of the international market in December 1996. There are now up to 30 operators offering calls over their own international networks and 50 operators offering international calls over the networks of other operators. Over the last five years international call volumes have increased by 60% whilst the average price for an international call has fallen by 50%.

BT's market share has now fallen to below 37% for international calls made by business users and in the residential market, their share has dropped by 12% over the last five years.

In light of this increasing competition the Director General has decided, on the majority of the most commonly called international routes, to amend the regulatory requirements on BT to:

• reduce (from 28 days to one day) the period of notice which BT must give of price changes;

• remove BT’s obligation to provide Oftel with a prior breakdown of costs for price changes;

• remove BT’s obligation to seek the Director General’s consent to prices which are below cost; and

• confirm that in international markets which are competitive, and where BT does not have a significant share of the market, any different offerings to different groups of customers are less likely to be interpreted as ‘undue discrimination’ under BT’s licence.

Speaking today about Oftel's decision, David Edmonds, Director General of Telecommunications said;

"Competitive markets are the best way of meeting consumer needs and achieving Oftel’s overall goal of the best possible deal for consumers in terms of choice, quality and value for money.

"Oftel’s strategy is that there should be regulation only where justified, and that regulation should be appropriate to the level of competition in the market. This action demonstrates, as competition increases, Oftel will lighten regulation."

Notes to Editors

1.  Oftel’s Statement on Competition in International Markets is available on the Oftel website. Copies are available to the media from Oftel’s Press Office (tel: 0171 634 8991) and to the public from Oftel’s Research and Intelligence Unit (tel: 0171 634 8761).

2.  Today’s Statement follows an Oftel consultative document on Competition in International Markets published in November 1999 and consultation on BT’s request not to have to publish charges for high capacity backhaul circuits.

3.  Implementation of the Director General’s decision to reduce BT’s regulatory obligations in respect of the international markets considered in today’s Statement will require modifications to BT’s licence. The proposed modifications are set out in Annex D to the Statement.

4.  As Oftel’s general policy is that Concert should be subject to the same regulatory constraints as BT, corresponding modifications also need to be made to Concert's licence. The proposed modifications to Concert’s licence are set out in Annex E to the Statement.

5.  Statutory consultation on the proposed modifications to both BT’s and Concert’s licences will commence on 10 March 2000.

4.  In order to ensure consistency with the modifications proposed to BT’s and Concert’s licences, it is also necessary to make certain corresponding modifications to the licences of other public telecommunications operators. These modifications are minor and deregulatory and Oftel proposes to implement them under the provisions of the Electronic Communications Bill, once this is enacted.

5.  On 6 March 2000 Oftel published a consultative document on the future of BT price controls, envisaging that such controls will continue (Oftel press release 12/00). Today’s Statement focuses on one area of the market where the Director General is able to relax controls on BT consistent with the growth in competition.

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