BT 2001 Annual Report Download - page 23

BT Annual report and Form 20-F 23
was granted a 3G licence, one of three
awarded.
Rest of the world
The World Trade Organisation’s
Agreement on Basic Telecommunications,
signed in February 1997, created a
framework for the progressive opening of
telecommunications markets in
accordance with world trade standards.
The agreement provides assurance that
commitments made by the 73
participating nations can be legally
enforced. However, the commitments
themselves provide only limited
opportunities in some markets. Detailed
implementation schedules are required in
many of those countries in which BT has
an interest. A further round of World
Trade Organisation negotiations on
services is due to take place, although
the timetable is unclear.
Other significant changes and issues
Local loop unbundling
In April 2000, following consultation, BT
accepted an amendment to its Operating
Licence which required it to provide
unbundled local loops to other operators,
to enable them to provide
telecommunications services, including
broadband DSL-type services, to end
customers. The amendment came into
force in August 2000, with local loop
unbundling (LLU) to be available from
July 2001.
The EU thereafter passed a
regulation requiring LLU, line sharing
and sub loop unbundling to be o¡ered
from December 2000, thereby bringing
forward the implementation date. BT
published a revised standard reference
o¡er on 29 December 2000.
During 2001, BT will introduce line
sharingasrequiredbytheEUregulation.
Oftel will determine the prices for the
broadband frequency band of a shared
loop after consultation and input by BT
of relevant cost calculations.
Carrier pre-selection
From 1 January 2000, the European
Commission required the provision of
carrier pre-selection (CPS) by Member
State operators with signi¢cant market
power. CPS allows customers to opt for
certain classes of call to be carried by an
alternative operator, selected in advance,
without having to dial additional access
codes.
Software changes to BT’s local
exchanges could not be introduced before
January 2001 (for national and
international calls) and January 2002 (for
all other calls) and HM Government
applied to the European Commission for
a deferment of BT’s obligation. The
European Commission granted a limited
deferment until 1 April 2000, but decided
that CPS should be provided in the
interim by means of auto-diallers on
customers’ premises.
BT introduced permanent CPS service
(for national and international calls) ahead
of schedule on 12 December 2000.
Leased lines
OftelpublishedaDirectioninrespectof
partial private circuits (PPCs) on
29 March 2001. This resulted from a
review of the competitiveness of the
national leased lines market in the UK
and the need for regulation in this sector.
The Direction followed a consultation in
August 2000 and an Oftel statement in
December 2000. Oftel has concluded that
more competition is needed in the
provision of wholesale ‘‘terminating
segments’’ and has proposed that BT o¡er
PPCs to other operators at cost-based
prices. Oftel has given time limits for the
conclusion of negotiations. It is expected
that the proposals will be implemented
during the second half of 2001.
Mobile services
BT Cellnet operates under its own Mobile
Public Telecommunications Operators
licence that authorises provision of a range
of mobile telecommunications services.
The Director General has previously
determined, and is in the process of
re-determining, that BT Cellnet and
Vodafone have ‘‘market in£uence’’. A
determination of market in£uence
triggers, among other things, an
obligation to supply independent service
providers with wholesale airtime on their
networks on fair and non-discriminatory
terms for resale.
As a pre-condition to eligibility for
bidding in the 3G licence auction, BT
Cellnet and one other existing second
generation (2G) mobile operator,
Vodafone, were required to agree to
amendments to their licences to
incorporate a ‘‘roaming condition’’. This
obliges BT Cellnet and Vodafone to allow
the one new 3G entrant to roam onto their
networks. The roaming condition will come
into e¡ect at the latest once this new
entrant has rolled out its network to cover
an area in which at least 20% of the UK
population live.
BT Cellnet and Vodafone will be
expected to negotiate roaming
agreements with the new 3G entrant. If
they are unable to agree, the matter may
be referred to the Director General for
resolution. The roaming condition will
remain in force until 31 December 2009.
In addition to the consultation on
termination charges for calls to mobiles,
Oftel has issued a consultation document
assessing the state of competition in the
mobile market and the form of regulatory
regime going forward. Oftel has indicated
that its initial view is that the mobile
market is not yet e¡ectively competitive
and that two or more of the mobile
operators in the UK are likely to be
subject to some regulation to promote
competition.