After months of talks and negotiations, telecoms watchdog, Oftel, has imposed tough price controls on telecommunications operator, BT.
BT must reduce its price hike
Oftel had previously promised that all price controls would be phased out as competition increased. However due to a very slow start to the unbundling process, Oftel has extended its hand over BT’s retail prices for another year.
“The controls are designed to save consumers money,” said an Oftel spokesperson.
It is expected that the package will save consumers an estimated £270m throughout the year.
The controls have pushed the value of BT shares down from 690p to 26p, resolving fears that shares could cost BT an estimated £90m, this year alone. Retail prices will be cut by 4.5 percent less than the rate of inflation.
David Edmonds, Oftel director general, said in a press statement that controls were still needed to protect consumers.
Once the unbundling process has begun, perhaps next year Oftel will waive its right to enforce price controls over the telecoms giant. BT’s conduct over the next year will be vitally important.