Ofcom looks into BT pricing strategy

Following complaints from Thus and Gamma Telecom, Ofcom is investigating BT’s wholesale pricing strategy for voice calls.

Thus and Gamma believe that BT’s pricing has been squeezing their margins to such an extent that it risks putting them out of business.

If this is correct, then BT could be found to have used anti-competitive practices in contravention of the Competition Act 1998 and Article 82 of the European Treaty.

Ofcom will consider whether the price that BT has been charging resellers for wholesale end-to-end calls since April 2005, is actually below cost.

If so, BT could be seen as having abused its dominant position and the only party to have benefited from this price war will be the resellers.

BT insists that it has acted properly throughout, but says it will co-operate fully with Ofcom’s investigation.