Ofcom's review of the telecoms market last week highlighted a telecoms market in which BT still dominates.
This is potentially hindering competition as the market shifts from analogue to digital IP-based networks. But pressure or intervention from the regulator could mean better telecoms deals for UK business.
Ofcom said it has identified two key problems:
- An unstable market structure in fixed telecoms, dominated by BT and with alternative providers that are, in the main, fragmented and of limited scale
- The continuance of a complex regulatory mesh, devised over 20 years of regulation and in many areas dependent on intrusive micro-management to achieve its purposes.
The regulator outlined three options to foster competition in the telecoms market: full deregulation; an Enterprise Act investigation into BT; and requiring the telecoms giant to give its competitors equal access to its networks.
Ofcom chief executive Stephen Carter said, "As the move to the next generation of telecoms brings more choice and lower prices, we need a regulatory approach that is focused and which encourages investment and innovation in the infrastructure and services of the future."
Ben Verwaayen, BT chief executive, said, "We welcome Ofcom's call for a new settlement where regulation is tightly focused on the parts of the market that need it, with deregulation elsewhere. This would be a real prize for the industry, consumers and for British competitiveness.
"We will engage constructively with Ofcom and the industry during the final phase of the strategic review, looking forward to achieving regulatory certainty that will encourage investment and innovation."