UK's Ofcom delays BT fibre pricing decision after CEO remarks

Logo of British Telecom (BT) is displayed outside a store in London
Logo of British Telecom (BT) is displayed outside a store in London, Britain, November 15, 2019. REUTERS/Simon Dawson
  • BT CEO's remarks anger rivals
  • Ofcom says it is committed to network competition
  • Says it would take regulatory action if necessary
  • BT shares drop 3.5%

LONDON, March 17 (Reuters) - Britain's telecoms regulator needs more time to consider BT's wholesale pricing, it said on Friday after concerns were raised over the company's boss saying its network expansion will "end in tears" for some of its competitors.

BT wants to offer discounts to internet service providers such as Sky, Vodafone (VOD.L) and TalkTalk in return for moving customers to the national fibre network it is building.

Rivals such as Virgin Media O2 and alternative fibre providers known as alt nets are investing billions of pounds to build competing networks.

However, Ofcom said on Friday that to provide certainty and stability it would not be appropriate for BT's Openreach (BT.L) to launch its Equinox 2 pricing scheme, planned for April 1, until the regulator has given final approval.

Openreach said it was important that Ofcom had time to consider all feedback fully and fairly and, therefore, its discounted prices would not take effect on April 1.

It added that prices will be backdated if Ofcom approves the scheme in May.

"Our offer is a response to customers, who want lower prices and long-term certainty to help them switch to faster, more reliable broadband connections," it said.

The regulator had said in February that it did not consider the offer from the former monopoly to be anti-competitive.


But comments made by BT Chief Executive Philip Jansen to the Financial Times - headlined "BT chief warns Openreach fibre push will 'end in tears' for rivals" - caused "significant concern", Ofcom said.

Ofcom chief Melanie Dawes said in a letter to Jansen, published on Friday, that the regulator was committed to network competition.

"Were it to become apparent that BT is able nonetheless to distort competition in the market, we would not hesitate to take regulatory action to address this," she said.

Jansen's response, also published by Ofcom, said his comments had been taken out of context in the article and headline.

Ofcom said respondents to its consultation had referred to Jansen's comments.

BT's earlier wholesale pricing offer, Equinox, was challenged by alternative fibre network provider CityFibre, but Ofcom decided not to intervene.

Virgin Media O2, BT's biggest network rival, has said Equinox 2 needed to be thoroughly scrutinised to ensure Openreach was not using its market power to stop providers switching to other networks.

BT shares fell 3.5%, the biggest faller in the FTSE 100 index, in early trading.

Reporting by Paul Sandle Editing by Jason Neely and David Goodman

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