Big firms to haggle over BT prices

Regulator's proposal to mean savings for enterprises?

Large organisations may see lower telecoms bills, following Ofcom's proposals to allow BT to negotiate high-value accounts more freely.

Under current rules, BT must apply standard line and call charges even to its largest customers. But Ofcom's proposals, published in early September, would allow firms that spend more than £1m on their telecoms services to negotiate with BT on pricing, and potentially gain savings without making the details public. The regulator said this will stimulate competition in the fixed-line market.

BT welcomed the news. "Ofcom has talked about introducing a deregulatory agenda, where appropriate, and it is good to see some action in this area," said UK managing director of global services, Gary Bullard. "BT will look at the detail in the paper and respond accordingly."

Ofcom also said that BT's competitors must be able to offer equivalent services using BT's Wholesale Line Rental and Carrier Pre-Selection products before BT will be allowed to offer negotiated pricing.

Ofcom is now assessing these products, and is due to complete the work on 30 September. A consultation process on Ofcom's proposals will close on 16 November.

Rob Bamforth of analyst Quocirca predicted that BT's rivals would not be pleased with the plans. "But ultimately it's inevitable," he said. "There are still things in place within the discussion document that Ofcom has put in in order to keep fair competition, like this idea of [equivalent services] for instance."