In what some are calling a second privatisation of British Telecom, Ofcom has revealed that pricing restrictions which have held back British Telecom for some time are to be removed. The company has not been able to subsidise landline facilities to make their bundles more attractive, putting the company on a less competitive footing compared to the likes of Virgin and BSkyB.
British Telecom has now been released from these restrictions and will be offering bundles including landlines, TV and broadband facilities which will be, in the words of British Telecom, “very competitive”. There is a feeling that the later part of 2009 could see a significant injection of competition into the sector and while the likes of Virgin and BSkyB will be able to compete on a level playing field, there is concern that some of the smaller broadband providers in the UK will suffer.
Slowly but surely we have seen many niche broadband providers squeezed by the larger operators who are now able to subsidise more traditional services to make their bundles much more attractive. As more and more people now require access to landlines, cable TV and the Internet, this is opening yet more doors for the larger players and placing more pressure on the smaller niche providers.