Britain dearest for local phone calls, says report

BRITISH consumers pay more for local telephone calls than their European counterparts despite an average 2.5 per cent reduction in local call charges over the past year.

A standard three-minute call cost an average 11.5p in the UK between January 1992 and January this year, said the consultants National Utility Services.

This compares with less than 6p in the Netherlands and Italy and 7.3p in France. Consumers in Belgium and Germany pay less than 10p while those in North America are charged less than in almost any European country.

NUS criticised BT for continuing to increase exchange line rental and connection charges. Britain is the third most expensive country for these charges among the 10 nations surveyed.

BT has in the past justified high local call charges on the grounds that they cover losses on line rental and connections. However, it recently won approval to increase line rentals at a higher rate than other charges.

Andrew John, NUS's director of sales and marketing, said that volume discounts accounted for almost all of the overall reduction in charges. Discounting schemes favoured large companies, where BT faces most competition. Similar schemes have also been introduced by BT's rival, Mercury.

Mr John said: 'Should BT be allowed to maintain its policy of lower prices for volume users it will be no longer economical for emerging suppliers, especially the cable companies, to compete.'

He suggested that the regulator, Oftel, should consider restrictions on BT's price reductions as well as increases in charges, as regulators do in the US.

According to a recent report by the National Audit Office, BT still has 90 per cent of the overall telecommunications market and 99 per cent of the residential market.

Since the company was privatised, price reductions have favoured business users, it added.