Ofcom has open an investigation into BT's price revamp which promised cheaper bills, after complaints from 13 telecoms companies.

The telecoms and media regulator said it would, within four weeks, rule whether BT had broken competition rules aimed at preventing the former state monopoly abusing its dominance in the fixed-line phone market.

Rival telecoms operators have claimed that BT's plans to abolish its standard call rate for residential customers and introduce a "simpler range of low prices" would distort the market.

Three million households have deserted BT for other providers of fixed line services such as Carphone Warehouse, which last year launched its TalkTalk brand.

If found guilty of market abuse, BT could be ordered to scrap its tariff rejig.

BT said last week that the revamp would make its fixed-line services cheaper than those offered by cable companies.

"Even where some of its main non-cable rivals are cheaper for some UK calls, any difference per month in bills are likely to be minimal," the company claimed.

BT shares stood 0.75p lower at 177.75p in afternoon trade.

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