CMA to press Ofcom on cash status of bidders

The Communications Management Association (CMA) said it would try to ensure that the new communications regulator Ofcom took a...

The Communications Management Association (CMA) said it would try to ensure that the new communications regulator Ofcom took a stringent view of the financial stability of those telecoms suppliers offering services to UK users.

The comments came as the CMA welcomed the formation of Ofcom to replace five communications regulators for radio, TV, radiocommunications, broadcasting and telecommunications.

Director of operations Mark Smith said the CMA would try to ensure that the regulator took a tough stance in favour of telecommunications customers, following the high-profile collapse of a number of telecoms companies, such as Worldcom and KPNQwest over the summer.

"Currently when a carrier applies for an operator's licence its financial health is not investigated," said Smith. The CMA has been working on the concept of compiling an "at-risk register" for use by those companies who make massive investments in telecoms companies. "A natural home for the register may be Ofcom," said Smith.

Over the coming months, as Ofcom is assembled, the CMA hopes to be able to persuade the regulator's executive to help it formulate the "at-risk register".

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