21st Feb 2014 10:36
LONDON (Alliance News) - BT Group PLC said in a letter to Ofcom released Friday that it will be announcing price increases for wholesale line rental and metallic path facility rentals in order to cover the interim period from between when existing charge controls end and Ofcom's new charge controls are enforced.
As a result of the British telecom regulator's fixed access market review, new charge controls for these rental services will come into effect starting July 1. However, the existing charge controls end March 31, which BT said may cause uncertainty for customers as to what will happen to prices in the interim period.
As the prices will potentially increase under the new charge controls, BT's Openreach unit said it will be increasing the prices to the top-end of Ofcom's proposed ranges. It suggested that MPF rentals would increase to GBP96.37 per year from GBP83.92, and WLR rentals to GBP96.17 from GBP93.32. It expects these price increases to come into effect May 17.
This would allow it to properly recover its 2014/15 revenue relating to the final charge control outcomes, BT said. The aim is to ensure that the average price over the interim period is the same as that in the first year of the new charge controls.
If the final determined prices are not at the top of Ofcom's range, thus leaving customers with a higher price in the interim period, BT said that it would make a rebate to customers covering the difference in price in August 2014.
"We will make these price changes on the basis of the expected delay to the new charge control, but if it appears likely that the conclusion of the review will stretch beyond 1 July we will make further announcements in good time," said Director of Regulatory Affair's at BT's Openreach division, Alan Lazarus, in the letter.
Ofcom responded to BT, saying that it is "grateful for the effort that BT is making to provide certainty to its customers and the wider industry during the period where no charge control is in place."
Shares in BT were trading up 0.4% at 416.80 pence Friday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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