Blog: Radical times

BT said it welcomed the review and agreed to work with Ofcom, but it also vowed to meet any break-up threat head-on.
“No other nation has contemplated the break-up of a former incumbent and the arguments against such a move are well rehearsed,” the company said. “The economy benefits from a strong, vibrant and competitive BT.”
Telecoms expert Christian Maher reckons Ofcom’s review is likely to be radical.
“We have speculated since the review was commenced at the turn of this year that a split of BT was on the agenda,” he said.
Analysts said Ofcom’s statement was expected.
“It doesn’t clear the air, it just creates more uncertainty with regard to BT until December, because that’s the one thing everybody is going to talk about.”
One change that is already taking effect is an overhaul of the prices BT charges rival broadband operators.
Following an Ofcom enquiry, BT is lowering the amount it levies on other firms to switch customers between broadband networks by 78% from 1 May.
Ofcom ruled “migration charges” were an obstacle to fair competition.
This means rival operators like Tiscali and Thus will now pay only £11 to BT for each new broadband customer they sign from rival firms.
Broadband service providers welcomed the announcement but said further reforms were needed, including cheaper activation fees, to make the market more flexible.
“We would hope that Ofcom will now look at the activation fee, which is still far too high at £50,” said Mary Turner, chief executive of Tiscali UK.