Report slams Oftel for not promoting consumer awareness of BT’s rivals

• Watchdog criticised for not doing enough to boost the profile of BT’s rivals
• Fewer than one in four able to name an alternative supplier to incumbent
• Lack of clarity over comparing pricing tariffs also blamed for customers not switching suppliers
• Net result: BT still controls over 70% of the residential fixed line market

A report from the National Audit Office (NAO), due to go before parliament today, will claim that the UK telecoms regulator Oftel is failing to adequately promote consumer awareness of alternative service providers to former monopoly operator BT. The document will say that Oftel has failed to ‘ensure that consumers are aware of the choices available to them’ and many are not changing suppliers or even aware of the existence of rival players in the market. The report, presented by NAO supremo Sir John Bourn, found that over a two-year period 68% of consumers had made no alternative arrangements for the supply of telephony services and a colossal 77% could not even name a telecoms services provider other than BT. The NAO will lay the blame squarely at the door of Oftel which it believes needs to adopt a more pro-active strategy akin to gas and electricity regulator Ofgem and Energywatch, the consumer protection agency for the power utility sector. Sir John has said that whilst he applauds many of the efforts made by Oftel, it needs to improve its understanding of why consumers ‘behave the way they do’ and define strategies to make it easier for them to compare the tariffs on offer and better understand how to get a good deal for fixed line services. Unlike the gas and electricity markets, where new market entrants have managed to wrest share from the traditional suppliers, BT is by far the dominant services provider controlling some 70.6% of the residential market by revenue at the end of 2002, compared with 68.5% the previous year, and 78.2% of the market by volume, up from 75.2%.

Source: Oftel/CIT's UK Telecommunications Report 2004