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BT appeases rival ISPs

Telco makes further wholesale price cuts

BT has cut the cost of its wholesale DataStream broadband product following complaints from competitor ISPs that the telco was acting uncompetitively.

Last month BT slashed the price of its IPStream wholesale service by £2 per customer per month. IPStream customers are those which sell their content and services over BT's network infrastructure.

But it failed to award similar price cuts to DataStream customers — those paying a monthly charge to BT to hook up to their own infrastructure — leading to a rash of complaints from rival telcos.

ISPs Thus, Tiscali and Energis, among others, immediately contacted teleco watchdog Oftel claiming anti-competitive behaviour.

Perhaps under pressure from such complaints, BT yesterday announced discounts of 70p (plus extended discounts of up to 17p) on DataStream services, bringing monthly fees for consumer products down from £9.25 to £8.55.

"As part of our drive to reduce broadband prices, we agreed, in discussions with Oftel, to also cut DataStream prices," said Paul Reynolds, chief executive of BT Wholesale.

But Tiscali is not happy with the price cuts, which are less than a third of those received by IPStream customers. It says the prices are a clever manoeuvre by BT to avoid heavy price concessions being imposed by Oftel, and pressure from rival telcos simply pushed its hand.

"We expect Oftel will continue its investigation into current pricing complaints to prevent ongoing discrimination in favour of BT's offer, especially as nothing has changed in the business tariffs where BT is obviously trying to reinstate itself as a monopoly," said Sergio Cellin, CEO of Tiscali.

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