BT Group (LON:BT.A) has come under fire over payphone earnings, The Telegraph has reported. The news comes after the former telecoms monopoly was also hit with temporary price caps and other restrictions last week, after a court rejected a plan to allow rivals to take control fibre-optic lines.
BT’s share price has gained ground in London this morning, having added 0.63 percent to 248.01p as of 09:32 GMT, outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.22 percent higher at 7,425.97 points. The group’s shares have lost more than 30 percent of their value over the past year, and are down by just under a third in the year-to-date.
The Telegraph reported over the weekend that research commissioned by Vodafone (LON:VOD) had estimated that BT’s remaining estate of 47,000 payphones generated earnings before interest and tax of around £14.5 million, at a margin of 40 percent. While the former telecoms monopoly does not report the financial details of its payphone business, the newspaper notes that consultancy Cartesian estimates that the unit brings in annual revenues of around £36 million, with the money coming from advertising and banks installing cash machines in telephone boxes, as well as calls.
Vodafone is calling for regulators to clamp down on payphone access charges, a levy paid to BT by providers of 0800 numbers to help fund the upkeep of kiosks, with the report suggesting that given the profitability of the payphones, the charges “may no longer be proportionate”.
Telco rejects claims
The Telegraph quoted a BT spokesman as rejecting the claims, arguing that with calls from payphones declining by more than 90 percent over the last decade, “it’s nonsense to suggest that BT’s payphone business is making a huge profit”.
“Consumers don’t pay the payphone access charge. Calls that are free to callers from a landline and mobile are also free from payphones,” the spokesman added.