BT is to be allowed to sell cheaper triple play broadband packages, after the telecommunications regulator waived 25-year old marketing restrictions on the broadband and home phone provider.
The rule had been aimed at fostering competition among UK telecoms firms and was imposed at a time when BT’s size and stranglehold on the market meant that it was deemed to leave rivals at a disadvantage. The ban was deemed necessary because BT would be able to offer cheaper domestic phone calls and thus undercut rivals competing for a share of the market.
Ofcom’s move to scrap the rule means that from hereon in, BT will be free to sell broadband packages that bundle together voice, broadband and TV services at a reduced price for the first time.
According to the watchdog, the change has been enabled by the fact that some 13 million homes and small businesses in the UK now take their landline phone services from rival broadband suppliers.
This shift in the market meant that consumers’ phone bills had dramatically reduced in a short time. Ofcom calculates that the average monthly landline bill in 2003 was £25.04, but by last year had fallen to just £21.57.
The arrival of cheaper broadband deals from BT is in turn expected to prompt competitors to cut the cost of their own triple play product offerings to the ultimate benefit of millions of consumers.
BT chief executive of retail Gavin Patterson said: "This is good news for consumers and businesses as it will allow us to offer more targeted discounts on products and services and more attractive bundles at better prices, something we have been unable to offer widely to date."
Britons’ increasing awareness of the cost savings offered by choosing a broadband bundle instead of taking individual services from separate providers was highlighted by figures from last year. These showed that 46 per cent of consumers chose a package that offered two or more telecoms services. This compares with a figure of just 29 per cent from 2005.
Jessica McArdle, marketing manager at Top 10 Broadband, commented: “The change to regulations is terrific news for consumers and the industry alike.
“We anticipate a slew of brilliant deals to hit the market in months to come.”