Further supplementary memorandum by Reuters
Ltd (text taken from e-mails of Ben Wilson (Public Affairs Assistant)
of 20 June)
TELECOMS PRICING
I attach (in Powerpoint) some slides put together
from Tarifica's latest benchmarking report[11]
which gives a snapshot of various telecoms tariffs as at 31 March
2000.
The slides show list prices from incumbent operators
in European countries for the following services: the monthly
rental PSTN (for dial up Internet access) charge for a business
user, the monthly rental charge for a basic ISDN service, the
cost of an hour's videoconferencing from Europe to the US, and
the monthly costs for national and international 64 kbit/s and
2Mbit/s leased line circuits. The slides update the ones included
in the presentation we gave to the Committee on 17 May.
It is worth noting that, by comparing incumbent
(BT, Deutsche Telekom etc) list prices across Europe, we are comparing
like with like. It is sometimes argued that list prices are not
a fair reflection of the picture as discount schemes are offered
to major users. However, it should be recalled that list prices
are what SMEs pay.
In general, the slides show that the UK continues
to lag behind the rest of Europe. The leased line slides show
that, although UK prices did drop between December and March,
they only did so by circa 4 per cent, whereas European prices
on average dropped by 10 to 11 per cent. For 64 kbit/s circuits,
UK prices are still among the very worst. For two mbit/s services,
the UK position has slipped from just below average to the lower
end of the scale.
The message would seem to be things are changing
here, but that prices are falling faster elsewhere.
Note: The reason we focus on these particular
tariffs (PSTN, ISDN, leased lines) is that they represent three
key means for businesses to access the Internet.
11 Available from the Committee Office, House of Lords,
on request (020 7219 6798). Back
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