BT share price: Ofcom fines company for missing deadline on speech service

BT Group Plc (LON:BT) has been fined by the UK communications watchdog for missing a deadline to improve its text-to-voice service for its customers with hearing or speech impairments. Ofcom said today that BT must pay an £800,000 fee to the regulator, which will then be passed on to HM Treasury.

The fine stems from an Ofcom investigation, launched in June, last year, into BT’s failure to meet the required deadline. In October 2012, Ofcom ordered all UK landline and mobile providers to launch a service aimed at helping users have more natural conversations using speech as well as text. The watchdog told providers to launch their “Next Generation Text Service” by April 18, 2014. BT missed the deadline, attributing the delay to technical problems, which prompted the subsequent Ofcom probe.
Claudio Pollack, Ofcom’s Consumer and Content Group director, commented: “The size of the penalty imposed on BT reflects the importance of providing an improved text relay service to its customers with hearing and speech impairments.” However, Pollack also welcomed that fact that the telecoms giant had successfully launched the new text relay service, “which allows users to have conversations more easily and fluently and on new devices”. BT launched its Next Generation Text Service on September 24, 2014, more than five months after the initial deadline.
In today’s trading, BT shares were down 0.7 percent at 448.40p, as of 12:46 UTC. The stock has risen 11.7 percent since the start of the year. The company’s market capitalisation currently stands at £37.5 billion.
BT has also made headlines recently in relation to its £12.5-billion takeover of the UK’s largest mobile carrier EE. The UK’s Competition and Markets Authority (CMA) has send letters to interested parties asking for their early views on the deal’s impact on different areas of the UK telecoms sector, ranging from mobile and broadband to the triple-play and quad-play markets. A report by the Financial Times over the weekend revealed more details about the requests.
In a letter seen by the newspaper, the CMA highlighted several areas that could suffer a “potential impact” from the BT-EE deal. These areas included how BT provides connections between mobile masts for its soon-to-be rival network operators as well as the retail market for mobile and fixed voice, data and broadband services. The CMA also asked about concerns over the provision of triple play and quad play bundles, in light of the upcoming merger, which is set to combine BT’s existing broadband and television services with EE’s mobile offerings.
The biggest concern among BT rivals appears to be the power of BT in the wholesale broadband market. It is expected that BT rivals such as Vodafone will argue that the telecoms group needs to offer improved wholesale access to the fibre network that connects their masts.
“When BT was giving us all the same sort of service without being in the game, that was OK,”the FT quoted a rival executive, as saying. “But it will own the largest mobile group and will in effect be paying itself for access to its mobile backhaul.”
As of 14:46 GMT, Tuesday, 17 March, BT Group plc share price is 448.25p.