BT 'hiding' public sector price rise

Monday, November 06, 2006

BT has been called cynical and sneaky for 'hiding' an increase that will hit government bodies.

According to Manchester Metronet (MM), a competitor of BT services, the telecoms giant has "suppressed publicity" of its recent change of name for private network services. The reason it did this, says MM, was to hide a substantial hike in prices that will affect government organisations investing in leased line internet access for mission critical applications.

On 30 September 2006, BT abandoned its line extension services (LES) in favour of ethernet extension services (EES). MM said this is simply a new name for the same service, but with a price premium averaging 75%.

MM director James McCall said: "I just can't believe they have managed to slip this one in unnoticed. They were already charging a fortune for ethernet circuits, now they have managed to get away with almost doubling the cost. Internet services providers (ISPs) almost invariably depend upon BT for local loop LES 10, 100 and 1000 circuits to deliver internet services to end users. Indeed, BT costs traditionally form the bulk of what the end user pays, a cost that is now to be significantly hiked."

Manchester Metronet claims that BT’s increase will be passed directly to end users ordering leased line Internet services from their ISP. For an increasing number of businesses, internet connectivity is mission critical and there is no option other than to have a leased line. For the majority of end users, BT is the common factor, even if it is not supplying the internet service. This situation, the company claims, makes nonsense of a deregulated free market. Many customers, unaware that BT is integral to the delivery of their internet services, face an enormous unexpected increase in costs.

* BT has been selected as a sub-contractor to Atos Origin to deliver a managed network service for the Department for Constitutional Affairs. The contract is worth £126m over 10 years. BT will convert three existing networks into a single, more secure network which is expected to deliver cost savings and ensure better and faster IT services to DCA clients and staff.

Gary Bullard, president, Global Business & Services, BT Global Services, said: “We are proud to be working with Atos Origin in a deal which will modernise the way the DCA does business, delivering more effective and efficient communication. Pne unified network will enable the department to offer its employees full access to the applications and information services whenever and wherever they need it, while maintaining all aspects of security. With increasing pressure on the public sector to deliver efficiency savings and improve service delivery, the benefits of this deal to the DCA and the tax-payer are clear.”