Ofcom published a statement in May 2004, which considered whether BT should be permitted to offer discounted prices for bundles of business services, where some of the products in the bundle fell within markets in which BT holds SMP. The statement set out the circumstances in which Ofcom considered that it was appropriate to permit BT to offer discounted prices for bundles, which included a requirement that the products in the bundle be replicable. The statement concluded that many of the services in SMP markets were not replicable and that it would therefore not be appropriate to permit BT to bundle these products together and offer discounted prices for the bundle.
This document revisits that assessment, in light of the changes and improvements that BT has made to the wholesale products used by other communications providers to compete against BT in these markets, and seeks the views of respondents as to whether BT’s retail business calls, exchange lines and leased lines products appear now to be replicable.
If Ofcom concludes that these retail products are now replicable, it proposes to no longer presume that BT is unduly discriminating if BT decides to offer bundles of retail business calls, exchange lines and leased lines products, either with each other or with other retail business products from markets in which BT does not have SMP. Providing that BT complies with the pricing tests set out in Section 2 below, BT will also be able to offer these bundles at discounted prices (relative to stand-alone prices). Ofcom would, however, be concerned about any saw-toothed discount scheme and be likely to take the view that such discount schemes would not comply with the pricing tests.