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The UK's only council-owned telephone company may ask staff and local people to invest in the firm as it bids to fe...
The UK's only council-owned telephone company may ask staff and local people to invest in the firm as it bids to fend off the threat of competition from BT.

Kingston Communications, which is fully owned by Kingston upon Hull City Council, could lose its monopoly in the area following a review ordered by telephone watchdog Oftel.

The council formed the company in 1987, having directly provided telephone services since 1902. BT's licence bars it from operating in Hull, but regulator Don Cruickshank's review could see the telecommunications giant allowed into the Hull market (LGC, 13 March).

With Mr Cruickshank due to deliver his verdict soon, the council and the company will hire consultants to see how it can attract funding to satisfy its investment plans.

A council spokeswoman insisted the move would have gone ahead irrespective of the BT threat: 'KC needs to invest in its future.' She said the level of investment sought remained 'confidential to the company'.

Investing in the company could prove attractive. Dividends paid to the council from Kingston Communications profits are projected to reach£4 million next year.

But the council insists the firm is not for sale on the open market and that it should remain a 'people's company'.

Council leader Patrick Doyle said: 'Our intention is to retain KC as the people's company - unique with its brand of social ownership, based here in Hull, continuing to provide quality services and jobs for our citizens.'

Kingston Communications chief executive Steve Maine said: 'We have an ambitious growth strategy both in the local area and nationally. We are committed to ensuring our network remains in the vanguard of telecommunications technology anywhere in the world.'

Oftel believes Hull residents and businesses need the same choice of telecoms services as offered in the rest of the UK. Kingston Communications points out that providers other than BT have been free to operate in the area, but have failed to do so because of the value the firm offers.

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