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January 19, 1988

CUT IN TELECOM’s INTERNATIONAL LEASED LINE CHARGES TO BE OFFSET BY UK HIKE

By CBR Staff Writer

British Telecom International is to reduce the cost of leasing an international connection by up to 40% from the February 1 as a sweetener before a less palatable increase in UK leased line tariffs to be announced this week. Although leased line prices are not covered by the RPI-3 formula at the moment, industry believes that the Office of Telecommunications may block Telecom’s UK plans to increase leased line tariffs by bringing this profitable business into the formula. Telecom reports that Big Bang caused demand for leased circuits from the City of London to double in 1987. As part of its international leased line tariff reductions, British Telecom will also do away with connection charges for lines leased for a minimum of one year. Tariffs for the digital Satstream service will be reduced by 15% for transatlantic routes, while charges for 64Kbps Kilostream connections to Japan, Hong Kong, South Korea, Singapore, Australia and New Zealand will be reduced by 20%. Analogue links to the same countries will be reduced by 11%. Price reductions of up to 40% are to be made for circuits using what Telecom International claims is the world’s first international fibre optic cable, called UK-Belgium 5. In addition prices on the TAT 8 transatlantic fibre optic cable, in which Telecom International is a leading partner, will be decreased by up to 7%. Customers who order most private line services for one year or more are due to sign a different contract from February 1, which eliminates the connection charge. All connection charges will also be abolished for circuits leased for a fixed period of three years or five years.

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