Ref: 53/01
Date: 30 July 2001

The UK has a flourishing dial-up Internet access market that offers a wide range of unmetered access services at competitive prices, Oftel confirmed today.

Oftel has today set out its initial conclusions on the level of competition in the dial-up narrowband Internet market, and is now consulting on these views.

In a consultation document published today, the review highlights that:

• 10 million households have Internet access – up from six million a year ago;

• 35 per cent of households choose some form of unmetered Internet access package;

• consumers have some concerns about the quality of customer service they receive and the availability of information to enable them to chose the right package.

Oftel sets out its initial conclusions from its review of three markets: dial-up narrowband retail Internet access, wholesale call origination and wholesale Internet call termination.

Oftel considers that competition is effective both in the retail and wholesale Internet call termination markets. While wholesale call origination is not effectively competitive, there is already regulation in place to address this in the form of a cap on BT’s charges and Oftel’s FRIACO direction.

Oftel will now consult with the industry and consumer groups before reaching final decisions on whether action is needed to promote further competition in either the retail or wholesale markets.

Commenting on Oftel’s review, Anne Lambert, Oftel’s Director of Operations, said today:

"With a large number of Internet service providers, a wide range of unmetered and pay-as-you-go Internet access products, and prices among the lowest in the world the review confirms that consumers get a good deal for Internet access.

"However, some concerns have been raised about the quality of customer service and the availability of information and the review asks whether the industry should take further measures to improve these.

"Greater use of unmetered Internet access has implications for the networks in how they carry the large amounts of traffic that unmetered access generates. The review asks the industry whether further regulatory measures are needed to ensure that ISPs get a good deal from their wholesale network suppliers."

Oftel’s final statement on the dial-up Internet access market will be published towards the end of this year.

Notes to Editors

1 Oftel’s consultation document Effective competition review: Dial-up Internet access is available from Oftel’s website at www.oftel.gov.uk/publications/internet/imr0701.htm. Hard copies are available to the media from the Press Office by calling 020 7634 8991 and to the public from the Research & Intelligence Unit on 020 7634 8761.

2 The review considers three distinct markets: Retail Internet Service Provision (the service purchased by consumers from Internet Service Providers (ISPs), of which there are more than 400 in the UK), and two underlying wholesale markets: call origination and Internet call termination (ie the services which ISPs must purchase in order to sell retail services). These wholesale services are typically purchased from telecommunications companies such as BT, Energis, Cable and Wireless and many others.