BT share price: Group legally forced to improve broadband speeds

Government rejects telco’s voluntary offer

BT share price: Group legally forced to improve broadband speeds

The UK government has confirmed that universal high-speed broadband will be delivered by a regulatory Universal Service Obligation (USO), rejecting BT Group’s (LON:BT.A) voluntary offer to improve speeds. The former telecoms monopoly, which provides broadband to its own customers and to other suppliers through its network division Openreach, said that it respected the government’s decision.

BT’s share price has been subdued in London in today’s session, having shed 0.97 percent to 271.10p as of 09:55 GMT. The shares are underperforming the benchmark FTSE 100 index which currently stands 0.11 percent lower at 7,536.06 points.

Government rejects BT’s proposal

The government said in a statement today it believed that only a regulatory USO offered sufficient certainty and the legal enforceability required to ensure high speed broadband access for the UK by the end of the decade. The government noted that while it had welcomed BT’s proposal to improve speeds earlier this year, it did not feel that the offer “was strong enough for us to take the regulatory USO off the table”.

The former telecoms monopoly had offered to spend up to £600 million on upgrading internet speeds for more than one million rural homes, amid regulatory pressure to improve the performance of Openreach.

“We are grateful to BT for their proposal but have decided that only a regulatory approach will make high speed broadband a reality for everyone in the UK, regardless of where they live or work,” Culture Secretary Karen Bradley noted today.

Former telecoms monopoly responds

Reuters quoted the FTSE 100 group as saying that it respected the government’s decision.

“BT and Openreach want to get on with the job of making decent broadband available to everyone in the UK so we’ll continue to explore the commercial options for bringing faster speeds to those parts of the country which are hardest-to-reach,” the telco said, as quoted by the newswire, adding that it was “looking forward to receiving more details from the Government outlining its approach to defining the regulatory USO, including the proposed funding mechanism”. 

As of 10:11 GMT, Wednesday, 20 December, BT Group plc share price is 270.90p.

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