Under the new regime agreed between British Telecommunications Plc and the Office of Telecommunications, prices for regulated services will remain unchanged until the Retail Price Index minus 3 formula for maximum price increases runs out next Au gust, and for four years thereafter will be limited by a more stringent RPI minus 4.5 percentage points, which means that inflation has to be running at over 4.5% for any increases at all to be permitted, and the effect is expected to be an inflation adjusted decline of 17% over the four years: the agreement covers inland direct dial calls, telephone line rental charges – but these are capped at only 2 percentage points above the rate of inflation, and, for the first time, operator assisted calls; international calls and new services are excluded, and chargesfor leased lines are to be subject to a separate price cap which is due to be announced in the autumn.
