The results of effective regulation shown again by the UK retail telecom sector

The last few years have seen the UK telecoms sector establish itself as one of the worlds most vibrant and competitive and it is all down to the commendable work that has been carried out by the UK’s telecommunications regulators.

During the early days of Local Loop Unbundling network operation, BT was forced to operate a separate wholesale division, which it called BT Openreach, when the regulator stood up to BT’s refusal to be regulated. When Openreach first started it had 360 000 unbundled lines but there are now 6.06 million unbundled lines with over 20 broadband service providers now offering services over this unbundled network, which are pretty impressive results.

Where effective competition exists there is no need for regulation has long been the mantra used by the Telecommunications regulator, Ofcom which has been an organisation that has rarely regulated just for the sake of regulation. In May 2008 it managed to deregulate the wholesale broadband market in locations around the UK that it felt offered effective competition, especially in business districts and large cities, and this is because it has long considered wholesale access to be necessary in the provision of infrastructure-based competition. Around 70 percent of the UK wholesale broadband market was affected by this move, in areas where no single company held significant market power (SMP) and where four or more broadband providers served customers.

It was estimated back in August 2005 that the estimated reduction in costs to consumers and UK Businesses would come to around £350-£400 million when Ofcom published the Network Charge Controls (NCC) for the following four years for BT’s narrowband products. It now appears that BT are no longer thought to have SMP as there is enough retail fixed-line telephone market competition, which has mainly come from providers like TalkTalk, Virgin Media and BSkyB who together service around 12 million businesses and homes in the UK, according to an assessment by Ofcom.

Source – Circle ID