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Telecoms

British Telecom lost its protected monopoly status when it was privatised in 1984. Between 1984 and 2005 BT’s market share of for fixed-line calls fell from 100% to less than 65%. 

The UK Broadband Market (2005)

Supplier

Customers

Market Share %

BT

15,000,000

62.5

NTL/Telewest

4,000,000

16.7

Talk Talk

2,400,000

10.0

Homecall

600,000

2.5

Sky Talk

500,000

2.1

Tiscali

250,000

1.0

Post Office

200,000

0.8

Source: Uswitch, 2005 

The de-regulation of the telecoms market, which followed privatisation, opened up the market to rival suppliers, and with the application of new technology, barriers to entry fell appreciably.

The network now can be used by other firms through a process called Wholesale Line Rental (WLR).

After being threatened with brake-up BT created its own independent division, Openreach, in 2004 to try to ensure fair access to its network for rival operators.

In 2005 Ofcom set an RPI - X pricing formula for BT's charges for the use of its network to encourage rivals to enter the market. By 2006 over 300 independent firms had access to the network infrastructure, making the UK telecoms market one of the most competitive in the world.

Even so, Ofcom has requested that BT speeds up its unbundling process, and has focussed a large part of its investigation on BT’s broadband pricing.

Today, the market can best be described as an oligopoly, with a three-firm concentration ratio of 89%.

Market shares of mobile phone operators

The mobile phone market in the UK is dominated by four main players - O2, Vodafone, Orange and T-Mobile.

Mobile phone market shares