QUARTERLY phone bills in Britain are set to plummet from an average £50 sterling to £30 under proposals announced by the telecommunications watchdog, Oftel.

The present price cap, which binds British Telecom to fixing prices to the rate of inflation minus 7.5 per cent, ends in July 1997. Oftel's announcement set out a proposed formula that would control prices to the retail price index minus a figure in the range of 5 per cent to 9 per cent.

BT said it was disappointed with the continued price controls, which it claimed would stifle investment and restrict customer choice.