Ref:  39/00
Date:  25 May 2000

UK consumers benefit from some of the lowest prices available for Internet access, fixed line and mobile phone calls, a major new international survey published today by Oftel shows.

The report showed that the UK had the lowest prices available for off-peak Internet access, and much lower than Sweden, the next best country surveyed. And for residential peak-rate access, the average UK consumer also had the lowest prices on offer.

Residential and business customers also benefited from the lowest mobile phone prices compared to the four other European countries surveyed.

The survey was carried out by the independent telecoms consultants Teligen and relates to prices on offer in February 2000. Oftel’s strategy published in January, highlighted benchmarking against other countries as an important way for Oftel to assess the relative competitiveness of telecoms services in the UK.

Commenting on the report, David Edmonds Director General of Telecommunications said today:

"Overall this is an encouraging survey of UK telecoms prices. Today’s survey shows that the UK’s increasingly competitive telecoms market is delivering some of the lowest prices for residential consumers. It is Oftel’s goal to ensure that all UK consumers get the best possible deal.

"UK residential Internet access prices surveyed were the lowest on offer for off-peak access, with the next cheapest Sweden having prices 28% higher. Mobile phone prices for consumers were also the cheapest on offer, with the second cheapest Sweden having prices 13% higher, according to the survey.

"In one or two areas the UK did not compare so well - prices for fixed line telephone services for businesses were average and Internet access for businesses were higher than average. I look forward to progress on this as competition contineus to deliver new tariffs to the benefit of consumers.

"Oftel will continue to monitor prices to see whether competition will continue to drive down prices and identify where regulation is still needed to promote competition or protect consumers.

"Benchmarking UK prices enables Oftel to see whether we are achieving our goal to ensure consumers get the best deal possible. This survey suggests that for the period covered in many areas we are.

David Edmonds added that the survey also highlighted that between them UK operators offered a wide range of pricing packages.

"Companies offer a wide range of packages for different types of consumers, and it is important for people to shop around to find the best deal that meets their needs.

"Oftel is working closely with the industry on a series of special initiatives designed to provide consumers with information on prices and quality of services. I welcome these initiatives by industry that help consumers to make informed purchasing decisions in the UK’s thriving telecoms market."

Notes to Editors

1. The survey was carried out by independent telecoms consultants Teligen in February 2000. Teligen’s report is available from Oftel's website at http://www.oftel.gov.uk. Copies are also available to the media from Oftel Press Office on (020) 7634 8991 or to the public from Oftel’s Research and Intelligence Unit on (020) 7634 8761. Although the information has been carefully checked, Oftel accepts no responsibility for the information contained in the report, or for any decisions made by suppliers or consumers based on the information contained in this survey.

2. The countries surveyed were France, Germany, Sweden, Italy (mobile only) and the American states (not including mobile) of California and Ohio. The countries were chosen on the basis of being major competitor economies to the UK and/or having advanced telecoms markets.

3. The comparisons were made by examining a range of call patterns by different customer types, both business and residential. All prices were converted to UK£ using the Purchasing Power Parity conversion rates, which is the standard approach used in telecoms international benchmarking comparisons. International comparisons need to address a number of difficult issues of methodology. While Oftel considers these have been addressed in a satisfactory way in this survey, it is looking to see how the approach adopted can be further improved for future surveys.

4. The survey was conducted to benchmark UK prices against those of a number of other countries and US states and should not be seen as recommended ‘best buys’. When making a purchase decision, consumers will want to have the latest pricing information, as well as take into account other factors such as service features, personal usage patterns, terms and conditions and indeed any other factors that they feel are relevant to their needs.

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