Ofcom limits BT wholesale charges

Ofcom will set a cap on the amount BT can charge for its wholesale product in an attempt to encourage competition.

The regulator announced the move today, claiming it was necessary to limit BT's charging powers to stop its "significant market power" stifling any other competitors out there.

Whilst 80 per cent of the country had significant competition available, according to Ofcom, 20 per cent fell into one of two categories. Either BT was the only provider on offer to residents or the firm had 50 per cent or more market share.

"We have concluded that there is not sufficient competition [in these areas] and so we have imposed regulation to protect consumers," read a statement from Ofcom.

As well as facing caps on how much it can charge rivals to use its infrastructure, other regulations will be forced onto the UK's leading telecoms firm.

"BT has significant market power in both of these markets and will be subject to a range of regulatory obligations, including general access and non-discrimination obligations and a requirement for charges to be cost oriented," it said.

The charge control will primarily be used in the areas where BT is the only provider but Ofcom has promised a further consultation into this.

The regulator concluded: "The aim of these regulations is to enable communications providers to purchase wholesale products from the dominant providers at prices that allow them to compete effectively in the provision of retail services."

We contacted BT for comment on the findings but it had not responded to our request at the time of publication.