Ofcom puts an end to 22 years of retail price control for BT

Communications watchdog Ofcom has removed the price controls it first imposed on BT more than two decades ago.

The regulatory body believes that increased market competition and continued cost reductions mean that it is safe to deregulate. Current retail price controls will cease at the end of July with the changes coming into effect from 1 August.

The decision deregulate was supported by Ofcom's Strategic Review of Telecommunications in September 2005 and subsequent public consultation in March 2006.

"The success of regulation is rarely measured by the ability to remove it. This is a good example of a market now functioning well," said Stephen Carter, chief executive of Ofcom.

"This deregulation is accompanied by appropriate and specific protections for vulnerable groups."

Analysts have also welcomed the ruling as long as Ofcom still intervenes where needed. Johanna Hellstrom, a research analyst at Ovum, said: "Ofcom's approach of regulating bottlenecks on the wholesale side while allowing for competition on the retail market appears appropriate, particularly as BT's market share in this area has declined steadily over the last few years.