BT to offer broadband and TV in UK landline package

BT was planning a new market push today after British regulator Ofcom allowed it to include broadband and television as part of a landline package for the first time.

The scrapping of the ban on landlines in BT’s discounted ’bundled’ deals ends the last major element of regulation imposed on BT 25 years after the firm - which has 14 million landline customers in the UK – was privatised.

Although BT still had a 56% share of the landline market in the first quarter of this year, Ofcom believes it no longer has “significant market power” in the majority of retail landline markets.

BT said it would be “competing on a more level playing field than recently”.

“It’s good news for consumers and businesses as this will allow BT to offer more targeted discounts on products and services and more attractive bundles at better prices, something we have been unable to offer widely to date,” the firm said.

Ofcom said other rivals such as Virgin Media, BSkyB and TalkTalk were providing effective competition to BT in the landline market.

According to the watchdog’s latest data, more than 12 million households and small businesses use a telecoms firm other than BT, while the average monthly cost of residential calls has fallen from £25.04 in 2003 to £21.57 in 2008.

Most telecoms firms offer discounts to customers when they buy two or more services, with nearly half – 46% – buying “bundles” last year.

Ofcom believes today’s decision, which follows a consultation in March, will increase competition in the delivery of bundled services.

Chief executive Ed Richards said: “This is an important step in deregulating telecoms where competition can be relied on to serve the customer interest.”

BT’s shares rose more than 3% today as investors welcomed the news after a difficult recent period for the business.

BT – which is cutting 30,000 jobs to slash costs – reported a £134m (€151m) annual loss in May following a hit of nearly £2bn (€2.2bn) in its troubled Global Services arm, which carries out IT networking services for major organisations such as the NHS and Unilever.