Price cut 'may hit BT for £220m'

BT Group has been ordered by watchdog Oftel to offer lower prices to businesses using its high-speed broadband internet lines, in the hope of boosting take-up of the service. One analyst said the move could knock £220m off BT's revenue.

A recent survey by the Organisation for Economic Co-operation and Development showed that Britain was 22nd out of 30 countries polled in take-up of internet lines by business customers.

Oftel's demand covers leased lines, which provide a permanently connected service and are known as partial private circuits.

Commerzbank analyst Khalim Aziz said the Oftel decision 'will knock around £220m off BT's revenue line'. The group's sales were £20.6bn in the year ended March.

Recent research claimed that BT's broadband services were cheaper than anywhere else in Europe, except Sweden.

Oftel director general David Edmonds said: 'This decision is an important part of Oftel's work to boost the development of broadband in the business market. I want to see afar greater take-up to ensure that consumers see the full benefits of competition in the leased lines market.'