BT resists Ofcom margin rule

BT has criticsed Ofcom for taking a ‘lopsided approach’ to the UK broadband market. On March 19th Ofcom confirmed it was going ahead with a new pricing rule, coming into effect on April 1st. The rule means BT must maintain a sufficient margin between its wholesale and retail superfast broadband fees, in order to allow other providers, which use the firm’s network, to match its profitability.

Ofcom said that while BT is currently maintaining a sufficient margin, the rule is a safeguard which limits its ability to reduce retail margins in future, and ensures that any increases in the telecom firm’s costs must be reflected in its prices.

A BT spokesman said: “We will now consider our options. The UK telecoms market is the most heavily regulated in the world, yet there has been little action to address Sky’s continuing dominance of the pay-TV market. This imbalance needs to be addressed.”

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