BT share price: Ofcom finds group guilty of overcharging Sky
BT Group (LON:BT.A) has suffered a blow, with the telecoms regulator ruling that it is guilty of overcharging FTSE 100 rival Sky (LON:SKY), The Times has revealed. The ruling opens the possibility that the former telecoms monopoly may have to pay its rival millions of pounds in compensation.
BT’s share price has lost ground in London this morning, having shed 0.23 percent to stand at 388.85p as of 09:22 BST. The group’s stock is underperforming the broader market, with the benchmark FTSE 100 index currently 0.10 percent better off at 6,825.12 points. The telco’s shares have lost more than seven percent of their value over the past year, and are down by some 17 percent in the year-to-date.
The Times reported this morning that Ofcom had ruled that BT was guilty of overcharging Sky, with the preliminary ruling opening the possibility that the former telecoms monopoly may have to pay its rival millions of pounds in compensation. The watchdog’s decision centres on a dispute with Sky over the charges which BT levies on rivals to resolve faults.
“We provisionally conclude that BT has not demonstrated” that those charges were compliant with applicable cost orientation conditions, Ofcom said in a detailed preliminary assessment of the dispute, as quoted by the newspaper, adding that repayments by BT would be ‘proportionate’, without, however, giving a figure.
Industry sources told The Times that a repayment to Sky could run into several million pounds. The newspaper also quoted a spokesman for BT’s network division Openreach as saying that the company would “continue to work with Ofcom in advance of any final settlement”.
The decision comes amid pressure on Openreach, with the new Culture Secretary recently signalling that ministers could intervene to break up the FTSE 100 group.
As of 09:50 BST, Tuesday, 27 September, BT Group plc share price is 386.85p.