British Telecom, under pressure from state regulator, Ofcom, may cut wholesale line rental charges to rival operators.

Stephen Carter, chief executive of Ofcom, the recently formed media and telecoms regulator, accused the company of being out of step with the rest of Europe on pricing.

According to Ofcom, BT comes second only to Luxembourg, with the highest prices in Europe. As a result its strategy is undermining the development of broadband internet.

Carter, who is investigating BT’s pricing strategy as part of a wider review said : “It would be surprising if at the end of the process, UK prices were not aligned more closely with best European practice.”

Rival companies such as Wanadoo, which are forced to lease lines from BT, have been pressing for price cuts so they can offer cheaper and better broadband services [WAMN: 29-Apr-04].

Wanadoo has indicated that if BT complies with the regulator it will be prepared to increase its UK investment. It is considering the feasibility of an internet television service.

The former state monopoly, which controls access to 73% of Britain’s residential lines, is fighting a rearguard action to prevent it from being broken-up.

BT’s legions of critics accuse it of arrogance in dealing with domestic and small business customers.

Data sourced from: Times Online (UK); additional content by WARC staff