Regulator may lift barrier to KC growth

TELECOMS firm KC could soon offer packages of services in Hull after the communications watchdog proposed lifting a ban.

Ofcom said allowing KC to bundle broadband, telephone and other

services could mean better value for its customers.

"Bundling" means offering packages of two or more services, and generally offers cheaper or better-value services. Ofcom allowed BT to bundle services in September last year, but barred KC from doing so because of its dominant market position.

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KC, a subsidiary of KCom, has a virtual monopoly on phone and internet services in Hull and parts of East Yorkshire, and currently only offers individual services.

Yesterday the regulator said: "Ofcom is concerned that the current regulation of KCom may prevent Hull residents from benefiting from the innovation and choice in the communications market that has been seen elsewhere in the UK."

It added in the first three months of the year, half of UK consumers bought a bundle of telecoms services, up from 29 per cent in 2005.

Sean Royce, KC's commercial and finance director, said: "We know from talking to our customers – both businesses and consumers – that many of them would welcome bundled phone and broadband services, but the restrictions placed on us mean we can't offer discounts and provide added value when selling two or more products as a combined package.

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"We've been in talks with Ofcom about this for some time and are pleased that the regulator has agreed to consider relaxing the regulations."

Mr Royce said being able to offer bundles would help it to compete with other providers as it expands beyond its heartland to Bridlington, Withernsea and Hornsea. It will also mean customers can receive one bill rather than separate ones.

However, KC said if the ban on bundling were lifted, existing customers' services would not be retrospectively "bundled" and they will have to apply for packaged services.