Centrica mulls legal action over BT tariffs

Maybe, maybe not

By Tim Richardson • Get more from this author

Posted in Business, 29th March 2004 11:27 GMT

Centrica is considering legal action over BT's decision to scrap its standard rate tariff.

Communications watchdog Ofcom is already poring over the BT price changes to see if it should take action against the telco on competition grounds.
Industry speculation is rife that the regulator could announce its next move by Wednesday, 31 March, although an Ofcom spokesman declined to be drawn on the issue.

If Ofcom decides not to act, then Centrica may be prepared to go it alone and take-on the UK's dominant telco, according to the Independent on Sunday.

A spokeswoman for utilities group Centrica - which owns One.Tel - said its lawyers are looking into the issue. If Ofcom doesn't act and if Centrica believes it has a case, then it would consider legal action, explained a spokeswoman.

According to BT, last week's decision to scrap its standard rate for line rental simplifies its tariff structure and is better value for money for customers.

Rivals, though, were quick to point out that by scrapping its standard rate, the UK's 2.5m carrier pre-selection (CPS) customers would see their bills rise by £12 a year.

CPS enables punters with a BT phone line to switch providers by receiving two separate bills - one from BT for line rental and one for calls from their new phone provider such as Centrica, Carphone Warehouse or Tele2.

Now that the cost of the minimum line rental has risen by £1 a month, CPS customers are being faced with an immediate extra charge. There are also concerns that new call tariffs imposed by BT could also be squeezing the CPS market. ®