BT Group (LON:BT.A) faces mounting pressure from regulators, rivals and its telecoms provider customers to cut the price of ultra-fast broadband services proposed by its network division Openreach, The Telegraph has reported. The news comes as the company also recently came under fire over payphone earnings.
BT’s share price has climbed marginally higher in London this morning, having added 0.04 percent to 257.20p as of 08:33 GMT. The telco’s stock is underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.7 percent higher at 7,351.25 points.
Pressure on BT Group
The Telegraph reported yesterday that Sharon White, the chief executive of Ofcom, had criticised Openreach’s plan to add £7 per month to the wholesale cost of broadband to pay for new upgrades. The division aims to deliver the upgrade by the mid-2020s by ripping out the old copper telephone lines connecting 10 million homes and replacing them with faster and more reliable fibre optics.
Openreach has told broadband providers including Sky (LON:SKY), TalkTalk (LON:TALK) and Vodafone (LON:VOD) that it would need to increase the wholesale bill to make a fair return for BT on the investment.
With the price viewed by BT’s broadband rivals as too high, Ofcom’s boss urged the former telecoms monopoly to reconsider.
“As the owner of Openreach – the national telecoms network which is becoming more independent from BT – it should act in the interest of all of its customers who rely on it, as well as its shareholders,” she pointed out, as quoted by The Telegraph.
The newspaper further notes that Openreach is due to reveal its detailed pricing proposals before Christmas, although the complicated talks between the company, its customers, regulators and the Government could drag into the new year.