Vodafone Group Plc (LON:VOD) is trying to overturn a move by the UK’s communications watchdog that will relax restriction on how much BT Group Plc (LON:BT) can charge for its business fibre connections, Reuter has reported. The mobile carrier argues that the move will result in higher bills for companies, hospitals and universities.
The regulator, Ofcom, relaxed price regulation in central London in 2016, as it deemed that BT did not have enough market power. Now the watchdog has eased restrictions in other cities where BT has two or more competitors, such as Birmingham, Bristol, Edinburgh, Glasgow, Leeds and Manchester. The basis for the price cap is also being changed from a cost-based one to a flat rate on the leased lines. The regulator believes that the move will incentivise BT’s rivals to develop their own networks. However, Vodafone has argued that Ofcom’s approach will be damaging to Britain’s “digital infrastructure transformation”.
The mobile carrier estimates that the relaxed caps would result in businesses and public sector organisations paying additional £230 million over the next 20 months. Vodafone also argues that the new regulations would increase the cost of rolling out masts for new 5G networks.
“We are not inherently pro-regulation, we believe in free markets, but where one company has significant market power, regulators need to be extremely careful before deciding to lessen regulation,” Vodafone’s general counsel and external affairs director Helen Lamprell said yesterday, as quoted by Reuters.
In today’s trading, the Vodafone share price stood at 155.52 GBX, as of 14:33 BST. The shares have lost 0.2% of their value since the start of today’s session. Vodafone’s total market cap currently stands at £41.6 billion.