BT responds to Ofcom's demand of better service23-Mar-2016
Ofcom today put forward strict new rules to improve BT’s performance in installing high-speed business lines and significantly reduce the wholesale prices BT charges for these lines.
The plans are part of Ofcom’s Business Connectivity Market Review, published today. The new rules will be finalised at the end of April, subject to consideration by the European Commission. Today’s announcement follows Ofcom’s Strategic Review of Digital Communications, which confirmed plans for tougher quality of service standards for BT’s Openreach division, and better quality of service across the telecoms industry. Ofcom’s Business Connectivity Market Review considers the £2bn market for ‘leased lines’ – dedicated, high-speed data links used by large businesses and mobile and broadband operators to transfer data on their networks. Most of these lines are owned and maintained on behalf of competing providers by BT.
Leased lines often require complex, bespoke installations, and the completion date may be affected by factors such as street works or difficulty accessing premises. Nonetheless, Ofcom has decided that Openreach is taking too long to install leased lines and is not providing adequate certainty that the services will be provided by the date first given to the customer. Since 2011, the average time between a customer’s order and the line being ready has increased from 40 to 48 working days. Ofcom’s proposals would require BT to reduce this to 46 working days by the end of March 2017, and return it to 40 working days the following year.
Ofcom has also found that Openreach is currently failing to complete one in four leased line installations on the initial date it promised to its customer. So Ofcom is proposing that by the end of March 2017 Openreach must complete 80% of leased line orders by the date it promises customers, rising to 90% from April 2018. Ofcom has also said that Openreach must fix at least 94% of faults on its leased line network within five hours. The new rules would apply to high-speed ‘Ethernet’ services, the most common type of leased line used by businesses.
Jonathan Oxley, Ofcom Competition Group Director, said: “All of us depend on high-speed, fibre optic lines. Businesses use them to communicate, and they also underpin the broadband and mobile services used by consumers at home and on the move. “BT is relied on by many companies to install these lines, and its performance has not been acceptable. These new rules will mean companies across the UK benefit from faster installation times, greater certainty about installation dates, and fast repairs if things go wrong.”
As well as lower prices for high-speed lines, Ofcom has confirmed plans to reduce the wholesale prices BT charges for leased lines services, which Ofcom expects to result in lower prices for businesses. The main ‘charge controls’ relate to two groups of services provided by BT. For BT’s Ethernet services with bandwidths up to and including 1Gbit/s, Ofcom has concluded an initial reduction in prices of 12%. For BT’s traditional interface services with bandwidths up to and including 8Mbit/s, Ofcom has concluded an initial reduction in prices of 9%. Ofcom aims to bring prices down over a three-year period from 1 May 2016.
In response to this Ofcom announcement a spokesperson for BT said: “Today’s statement from Ofcom is very much in line with what they proposed last year so there are no surprises here. “Competition and choice have been growing in the business connectivity market and we believe there is a strong case for less, not more, regulation. “We accept there is more to do on service and are committed to doing better and meeting our business customers’ rising expectations.
Source: COMMS Business 23rd March 2016