3.29 Over the ten years it is possible that the demand for some or all of the services may fall. In this case the contract contains minimum demand thresholds for services, below which prices can be re-negotiated. If demand falls persistently below these thresholds, BT can treat this as a voluntary termination. They can then cease delivery of that service, and will receive compensation from the Department.
3.30 The thresholds vary between services at between 26 per cent and 89 per cent of the expected demand levels at the start of the contract. For example, there only has to be an 11 per cent fall in demand for secure speech services before the threshold applies. The Department told us that the thresholds represent agreed minimum levels of economic viability, below which it is not worth maintaining a service at the contracted price. So BT are protected against downside volume risk, but it would also be in the Department's interest for BT to terminate a service if demand fell below these levels.