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Ofcom wants to give Hull bundled KCom services

The regulator has proposed allowing KCom, the only communications provider in Kingston upon Hull, to sell broadband and landline services in a discounted package
Written by David Meyer, Contributor on

Hull's dominant internet service provider, KC, is to be allowed to bundle broadband connectivity with other services under new proposals from Ofcom.

The telecoms regulator said in a consultation published on Thursday that KC — the retail ISP wing of the KCom Group and the only communications provider in the area — should be able to sell packages that combine broadband with landline and other services, leading to lower prices for Hull consumers. This would bring the area in line with the rest of the country, where bundled services are commonplace.

"We know from talking to our customers — both businesses and consumers — that many of them would welcome bundled phone and broadband services, but the restrictions placed on us mean we can't offer discounts and provide added value when selling two or more products as a combined package," KC commercial and finance director Sean Royce said in a statement on Thursday.

"We've been in talks with Ofcom about this for some time and are pleased that the regulator has agreed to consider relaxing the regulations currently in place. If the outcome of the consultation is that we're given the green light to offer bundled services, we'll be looking to launch these for both businesses and consumers as soon as we can."

In September 2009, Ofcom allowed BT to start bundling services, something it had been unable to do previously because it held significant market power (SMP) across the UK. At the time, Ofcom maintained its restrictions on KCom, which holds SMP in Hull — a peculiarity in the UK, in that it is the only area where BT has never had a presence.

However, according to Ofcom's statement on Thursday, the regulator is "concerned that the current regulation of KCom may prevent Hull residents from benefitting from the innovation and choice in the communications market that has been seen elsewhere in the UK". Half of British consumers gain discounts by buying bundles of two or more communications services, Ofcom said.

The regulator is holding a brief consultation on its proposals, with a closing date of 2 September. Ofcom's proposals are conditional on several factors: KCom will have to make its bundles available to all Hull residents and businesses, it will have to publish its bundle prices on its website, and there will have to be a price floor for the bundles so as to not price potential competitors out of the market.

Kay Stevenson, KC's communications manager, told ZDNet UK on Friday that KC's initial bundle offerings will comprise broadband and landline services, and the company is not currently planning to include TV services in its bundles.

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