Telecoms regulator Ofcom is to give greater protection
to enterprise users and spend less time on regulating the basic
telecoms services market.
At the annual Communications Management Association (CMA)
conference on 8 February, Ofcom executive director Sean Williams
said the regulator believed there was less need to intervene in the
basic services market such as entry-level broadband offerings –
where competition was increasingly intense.
He said, "When it comes to us re-evaluating the RPI plus or
minus price cap formula we put in place to ensure BT's prices for
basic services are fair to the competition, for instance, we may
decide not to even have such a formula for some services after we
study this area of the market this year."
Williams said recent Ofcom actions had already brought down
basic broadband prices and that major providers were now struggling
to make signigicant profit out of such services.
Williams acknowledged that most CMA members felt that UK
broadband prices were still too high, which was reflected in their
responses to the CMA's annual membership survey, which saw an
increasing number complain about broadband prices.
But Williams said there was now a growing need to focus on added
value and next generation services affecting the business
market.
He said BT's 20th Century Network Programme, which involves BT
spending billions of pounds on overhauling the UK's basic telecoms
infrastructure, and the recently established BT Openreach division,
which has been set up with Ofcom support to ensure fair broadband
competition for BT's rivals, were two drivers for the focus on
enterprise services.
The 21st Century Network will support and help expand new
IP-based services, such as voice over IP, while BT Openreach seeks
to promote local loop unbundling in BT exchanges, to enable BT's
rivals to offer faster and more flexible broadband and other
services.
Williams said, "We will concentrate on higher value services for
the enterprise market in the future, to ensure companies are
protected when it comes to new services that come out of new
infrastructure initiatives."
Williams said future intervention would very much depend on
supplier/user relationships. He said Ofcom would welcome firms
contacting the regulator about difficulties linked with certain
services or specific service contract concerns.
The Ofcom change in direction is a fillip to the CMA, which has
long campaigned for greater regulatory protection for business
users.