BT share price: Watchdog bans telco’s broadband adverts

on May 4, 2016
Updated: Oct 21, 2019

Three adverts by BT Group (LON:BT.A) have been banned for making misleading claims about the quality of the telco’s broadband services, the UK advertising watchdog has said. In a separate development, a new report has suggested that the former telecoms monopoly is the most likely UK company to bid for Channel 4.

BT’s share price has been little changed in today’s session, having lost 0.67 percent to 445.20p as of 14:20 BST. The shares, however, are outperforming the broader London market, with the benchmark FTSE 100 index currently being 1.02 percent worse off at 6,122.31 points.
The Advertising Standards Authority (ASA) said in a statement today that it had banned three adverts by BT, which claimed that the telco’s Infinity fibre broadband had more responsive online gaming and smoother video than Virgin Media, and faster download speeds than Sky (LON:SKY). The ASA said that the claims were not backed up by test results and ruled that the ads, first screened in October, must cease to be shown in their current form.

The ruling came as the advertising watchdog announced that it was strengthening its approach to advertised fixed broadband price claims to avoid customers being misled. ASA said that from October, broadband adverts would have to show all-inclusive up-front and monthly costs instead of separating out line rental. They will also have to give greater prominence for the contract length and any post-discount pricing, and give greater prominence to up-front costs.
In other BT news, the Guardian revealed today that a new report by academics at London Business School and Oxford University Centre for Corporate Reputation had estimated that the FTSE 100 telco was the most likely UK company to bid for Channel 4.
“Given its cash flow and balance sheet, BT could certainly afford to buy Channel 4, even after the EE acquisition,” the report said, as quoted by the newspaper. “It is also already expanding in TV, although this development is still at a relatively early stage.”
BT is scheduled to update investors on its full-year performance tomorrow. The Telegraph has reported that consensus forecasts suggest that the telco will post total sales of £18.8 billion, up five percent year-on-year, and pre-tax profit of £3.4 billion, up from £3.2 billion in the prior-year period.
As of 15:01 BST, Wednesday, 04 May, BT Group plc share price is 441.32p.