Telecoms watchdog Oftel ordered British Telecommunications to stop cross-subsidising its phone service BT Cellnet on Monday, drawing a furious response from the telco which accused the regulator of getting its facts wrong.
As part of an ongoing investigation into the mobile phone market Oftel found that BT Cellnet is using its network business to subsidise its own mobile phone service providers BT Cellnet, BT Cellnet Lumina and BT Mobile to the tune of between £1.50 and £8 per customer. It recommends that BT Cellnet drop the wholesale price of airtime to allow independent providers to compete on a level playing field.
BT Cellnet launched a vehement attack on Oftel accusing it of getting its facts wrong. It claims that Oftel, not BT, is to blame for lack of competition in the mobile phone service market.
It also denies that it unfairly cross-subsidises its services and claims Oftel is using outdated assessment methods to reach its conclusion.
"BT Cellnet considers the seven-year-old formula to be an anachronism that has passed its sell-by date," says a spokesman. "The major reason for imbalance in the mobile phone service provision market is due to regulatory decisions made by Oftel which permit Orange and One-2-One much greater freedom and flexibility in promoting their own service provision interests."
Taking the opportunity to win ground BT urged Oftel to end what it sees as a bias toward Orange and One2One. It also wants less regulation in the mobile market. "It is unfair that their are one set of rules for BT Cellnet that aren't applied to other operators. As far as we are concerned competition is working and it should be competition that sets the rules rather than the regulator."
Oftel stands by its methods and its conclusion that the mobile market still needs regulation. "Our methods are wholly suitable," says an Oftel spokesman.
"Both BT and Vodafone still have market influence and because of their market position they have to offer services to others on the same basis as their own."
Vodafone was also included in the investigation but was found not to be cross-subsidising its service providers. BT Cellnet has 28 days to respond to Oftel's findings.
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