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2003

THUS plc, one of the UK's leading providers of voice, networking, Internet and contact centre services announced today that it has asked the industry regulator, OFTEL, to commence an investigation into a 'margin squeeze' created by a new broadband pricing strategy announced earlier today by BT.

Commenting on the new pricing strategy Phil Male, THUS Chief Operating Officer said: "We welcome incentives designed to encourage the availability of ADSL broadband services in the UK. However it is important to ensure that those incentives are sustainable and do not compromise the development of competitive markets."

"BT's price changes relate to 'IPStream' connections - the wholesale end-to-end service provided by BT Wholesale to BT's retail operations and other service providers, including THUS. BT has failed to pass on similar price advantages to its Datastream service - a service which allows other service providers to use their own networks, to differentiate and add value to the standard and inflexible services provided by BT Wholesale."

"Furthermore those service providers that have opted for Local Loop unbundling, or who have indicated that they may explore this option in the future will be placed at a significant disadvantage as they see their investment devalued."

"A significant reduction in the wholesale cost of IPStream without a corresponding reduction in the wholesale cost of the Datastream service will discourage innovation and competition in the market for broadband services. Time and again BT has only reduced its prices when forced to by competition. If there are no competitive pressures in the market, a dominant operator can use the opportunity to set artificially high price points. Consumers, both business and residential, will ultimately pay the price."