BT share price: Ofcom accused of protecting former telecoms monopoly

on Jul 6, 2016
Updated: Oct 21, 2019

Industry regulator Ofcom is facing a legal challenge over claims that it protects BT Group (LON:BT.A) from broadband competition, The Telegraph has reported. The industry regulator has been accused by CityFibre of making “ridiculous” policy decisions set to cement the former telecoms monopoly’s position in the broadband market as a “single, unassailable wholesale infrastructure provider”.

BT’s share price closed little changed in yesterday’s session, shedding 0.12 percent to close at 402.00p, underperforming the broader London market, with the benchmark FTSE 100 index adding 23.11 points to close 0.35 percent higher at 6,545.37.
The Telegraph reported yesterday that in a submission to the High Court’s Competition Appeals Tribunal, CityFibre claimed that Ofcom was contradicting itself with its plans to reduce BT Openreach’s dominance in the broadband market. While the regulator´s plans are focused on allowing rivals to lay their own fibre optic cables via BT’s telegraph poles and underground ducts in the consumer market, for the business market, the ducts and poles remain off-limits in favour of dark fibre access.

The newspaper quoted Mark Collins, CityFibre’s director of strategy, as commenting that Ofcom appeared to be “more focused on protecting BT than promoting competition”.
The report comes after news emerged last month that BT’s Openreach division was in talks with, broadband network builder City Fibre about a large-scale fibre-optic roll-out over the FTSE 100 telco’s ducts and poles in Southend.
In analyst news, JPMorgan Chase & Co, which has a ‘buy’ rating on BT, set a price target on the stock of 490p this month. Goldman Sachs, which also sees the former telecoms monopoly as a ‘buy’, meanwhile set a valuation on the group’s shares of 540p. BT is scheduled to update investors on its first-quarter performance on July 28.
As of 08:17 BST, Wednesday, 06 July, BT Group plc share price is 402.00p.