BT retail price control

BT has met its price control requirement for the price control year 2001/2002.

BT is required to cut prices by RPI-4.5%, equivalent to £63.9m in revenue terms. However, as BT made excessive price reductions of £3m in the previous price control year, they can count this towards the current year's requirement. Therefore, BT had only to reduce revenue by £60.9m.

In October 2001, BT introduced a new offer, BT Weekend Chataway, where customers pay a maximum of 20p percall for all residential local and national geographic calls on selected weekends. At the same time, it reduced connection charges from £84.25 to £63.83 per quarter and cut the cost of connecting multiple lines.

BT also increased the value of the inclusive call allowance from £4.60 to £5.49 a quarter and introduced a new international chargeband covering calls to Cambodia, East Timor, Wake Island and Wallis and Futuna Islands.

BT also changed its rental prices . Customers paying by Direct Debit or monthly payment schemes saw their rental fee fall by £1.26 a quarter but customers paying by other means saw it increase by £1.29. However, the effect of this were offset by changes to reference tariff option fee.

Following changes to standard prices, BT made changes to the Light User Scheme (LUS) to meet the requirement that the bottom 21% of customers by usage are better on LUS than they would be on the standard package. A customer who made no calls would see their rental fee fall from £11.50 to £9.61 a quarter.

Overall, BT made sufficient reductions to meet its price control requirements. However, as this is the end of the price control period, it is not permitted to carry excess reductions into the following year.

For further information contact Hilary Anderson (tel: 7634 8937 / e-mail: hilary.anderson@oftel.gov.uk).