These further savings will help to ensure that consumers benefit from lower retail prices, and retain the UK's position of having amongst the lowest interconnection prices in the world. Oftel does not believe that this can be justified at this time. BT's call prices can still fall further and Oftel has decided to protect consumers by continuing retail price controls of RPI minus 4.5 per cent for a further year. This could save BT's residential customers about 270 million over the year. David Edmonds said consumers had benefited from lower prices due to price controls and increased competition, but he did not rule out tougher price controls on BT if prices did not fall further.
Competition continues to increase across all sectors of the telecoms market.
Oftel estimates the average bill for a residential consumer has reduced by about 20 per cent in real terms over the past three years due to price controls on BT and greater competition from indirect access suppliers and cable operators. The introduction of carrier pre-selection from January 2001, which will enable consumers to use alternative carriers for their voice calls without dialling additional digits, is also likely to have a significant effect on competition over the next year. If increased competition does not result in lower prices, I will introduce further measures to ensure that this happens. This could be by further price controls or by measures to increase competitive pressures on BT, such as forcing BT to allow operators without their own networks to use its network at charges based on BT's costs, rather than charges based on BT's retail prices as at present. The current retail price controls on BT are due to end in July 2001.