THE TELEPHONE RING -report by Barbara Allen *
There is overwhelming evidence of the need for full public investigation of the manufacture of telecommunicetions equipment in Great Britain and of the terms on which it is supplied to the Post Office. Facts already established show a tirhtly organised "rine" of companies in virtual control of the market and . restrictive practices which may lead tounnecessarily high prices . paid out of public monies. The firms involved are enjoying handsome profits; ond the arrangements for arriving at "cost-plus * prices" appear to give them the whole benefit of rising productivity. Far from assisting export sales, as it is claimed, the present restrictive agreements apnear to hinder competitive efficiency end the exnort record iS poOPececcce
During a five year period in 1963 the Post Office plans to spend about £350 millions on exchange equipment and telephone apparatus. Most of this money looks like going to a smali and tightly organised "rine" of firms with which the Post Office has signed bulk supply agreements. Two new agreements were signed in April 1963. Their effect will be that at least 75 per cent of the telephone apparatus and 90 per cent of exchange equipment will continue to be purchased from the ring, under non-competitive arrangements, until 1968,
The Post Office provides the main home market for this type of equipment. Restrictive tradin; arrangements between a few big manufacturers and the Yost Office make it virtually impossible for new firms to enter the market and also create a doubt whether public money is beine wisely spent.