Telco watchdog Oftel today announced it would not remove price controls over BT in July.

The existing retail price controls will now continue for a further year. The controls are designed to reduce BT's prices year on year by 4.5 percent in real terms.

Oftel had promised that all price controls would be removed as competition increased, but BT's reluctant (for which read obstructive) handling of the local loop unbundling issue means competition has not noticeably increased since this time last year.

"The price controls are still needed in the current climate," said a spokesperson at Oftel. "We will carry out a further review of the market later this year. If competition has increased then the price controls won't be needed."

BT accepted the controls but said it had hoped they would be removed shortly.

"As we move forward with opening up our networks, prices will drop by themselves, removing the need for controls," said a spokesperson at BT. "At this time Oftel felt the market was not ready."