In April BT reduced the price of the IPStream wholesale service by at least £1.75 per customer. This product is run wholly on the BT network, by BT. The Datastream product, which allows other operators to use the BT network on payment of a monthly fee, did not have a price reduction, and therefore the costs to other operators remained the same.
Complaints to Oftel followed, and an investigation ensued, resulting in a £0.70 reduction in the cost of Datastream, announced in May. Discussions between Oftel and BT have been continuing and yesterday BT announced a further price cut of £0.50 per line, effective today.
Two IPStream products, IPStream Office 2000 and IPStream S2000, will each have their monthly rentals increased by £5, effective from 16th October.
David Edmonds, Director General of Telecommunications said:
"I welcome BT's decision to cut its headline Datastream prices by a further £0.50 a line. I am now able to conclude this investigation without taking further action."
He added:
"I am independently looking at wholesale pricing issues as part of the broadband market review, due to be published next month. In the meantime, the Datastream price reduction represents a considerable saving to other operators and will ensure stability in the broadband market whilst Oftel finalises its review."
The news met with mixed reactions from rival telcos. Sergio Cellini, CEO of Tiscali, UK, told TheRegister.co.uk: "This is moving the right direction and is good news. We need to look at the overall impact but there is probably a little more movement to establish parity."
Clare Waters, Energis corporate office director told Reuters, ""BT's modest price cut today is an encouraging step, although it doesn't go far enough". She added, "More progress will be required for the UK to achieve widespread roll-out of broadband."