British Telecommunications Plc may be allowed to put up its line rental charges in a deal with the government to open up the telecommunications market. According to the Financial Times, Telecom, the Department of Trade & Industry and Office of Telecommunications are holding talks which could result in Telecom being allowed to increase rental charges by more than the current limit, the rate of inflation plus 2%. British Telecom has threatened to take the issue of charges to the Monopoly & Mergers Commission, after publicly complaining about not being able to increase charges in line with costs. However any increase would depend on Telecom producing measures to protect poorer residential customers, who would be particularly affected. A deal could pave the way for an early announcement on the future of UK telecommunications, currently being looked at by the government in its Duopoly Review and it could also remove obstacles to privatising the government’s 49% stake in British Telecom.
