Oftel tells BT to cut access costs

Real competition at the local loop level has come a step closer as Oftel cut the amount BT can charge rivals for access to its local exchanges.

The telecoms watchdog has reduced the annual rent that competitive operators have to pay for access to BT's copper phone lines. Rivals need access to these lines to provide theit own broadband services.

Oftel said that BT must cut the charge for providing line information from £5.30 per line to £2.60, and halve the premium it charges for escorted access to its exchanges.

"This will lead to lower charges, reducing costs for operators and giving them greater confidence to plan the roll-out of their high speed services," said David Edmonds, director general of Oftel.

Telecoms analysts said that the move was inevitable as BT's charges were excessive.

"Local loop unbundling hasn't really worked in any European country," commented Jonathan Doran, senior analyst for telecoms industry watcher Yankee Group. "I think the European Commission is starting to recognise that unbundling across the continent needs help."

Reports have also surfaced that WestLB, the German banking group that had a £18bn offer to buy BT's fixed-line business turned down last autumn, is to revise its offer.

A BT spokesman said that it would be inappropriate to make strategic statements given that new chief executive Ben Verwaayen had only been in the job a week.