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BT hits back at cut-price competition
Is it anything more than a marketing ploy?

By Ben King

Published: Wednesday 11 July 2001

BT today launched an attack on the cut-price competitors who have been eroding its share of the domestic fixed line market.

The company also claims it has successfully staunched the flow of lost business. Angus Porter, managing director of BT Consumer, said its share of the domestic market has remained stable at 73 per cent for the past four quarters, stabilising after a protracted decline.

BT has also stopped losing customers to NTL and Telewest, Porter claimed, and added that the net exodus of customers is now balanced out by cable customers returning to BT.

Nonetheless, BT Consumer is investing £10m in a joint marketing campaign with BSkyB Digital and ITV Digital (formerly ONdigital), offering BT customers a £30 bung to sign up with one of their TV partners.

Porter said: "One of the reasons we have had trouble persuading people to come back to BT is the cable TV package [offered by Telewest and NTL]."

He is expecting to deliver hundreds of thousands of new customers to the TV companies through the campaign.

The move comes as part of a smorgasbord of measures aimed at perking up BT's consumer offering.

The company has also cut its international prices, though it is still several times more expensive than many of the cut-price international telecoms providers. BT's calls to the US are 14p per peak minute and 9p per minute off-peak - several competitors offer calls to the US for as little as 3p per minute.

BT's international market share has stabilised in terms of minutes called, Porter said, though cost cutting has hit its market share in revenue terms.

The announcement with BSkyB and ITV Digital is little more than a marketing exercise, and Porter seemed anxious to dismiss speculation that the deal would form the foundation for a broadband content offering.

"There is no immediate prospect of a package in broadband," he said. "Broadband is a hugely complex and important issue but it is not what we are here to talk about today."