BT told: 'Cut phone bills in half'

A consumer watchdog is urging BT to slash the cost of phone calls, believing that there is still insufficient competition in the market.

Under current Oftel rules, the former telecoms monopoly is required to keep its prices falling at a rate 4.5 per cent lower than inflation each year. But the regulator is proposing to scrap that requirement, allowing BT the freedom to increase charges.

That move has provoked the ire of the National Consumer Council, the government-funded watchdog.

Anna Bradley, an NCC director, told The Observer: "The time to weaken BT's price controls is still a long way off. Little has changed since the existing controls were extended last year. The case for relaxation is built around claims of healthy competition that, frankly, does not exist - especially for older people and those on low incomes."

The NCC believes BT should halve the average phone bill.

BT has 81 per cent of the domestic fixed line market in terms of the number of lines.