Ofcom consultations could trigger quadplay price war

BT could benefit from Ofcom proposals

UK communications regulator Ofcom has launched three consultation processes relating to BT and fixed-line telephony markets. Ofcom will be seeking opinions on BT's network charge controls (NCCs), its fixed narrowband retail rules and wholesale services markets.

The consultations could be the precursor to a relaxation of regulations governing BT. This may allow the UK incumbent to offer packaged bundles for phone line rental, calls, broadband and pay-TV services, increasing the competition for the likes of Virgin Media and BSkyB.

Experts say that could trigger a price war. It may also enable BT to minimise the risk of its current customers moving to other communications providers which can offer phone, broadband, IPTV and mobile services all in one package, usually called quadplay.

"The challenge for Ofcom is how do you control the liberation of BT so that it is encouraged to do the right thing, while not letting it too far off the leash – perhaps it's taking off the leash but not the muzzle," said Rob Bamforth, communications analyst at Quocirca.

The NCC consultation closes on 30 September 2009, while both consultations on the fixed narrowband retail and wholesale services markets close on 28 May 2009.