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BT is 'building fibre monopoly', says TalkTalk CEO

Margi Murphy | Sept. 1, 2014
The battle over superfast broadband regulations ensues.

TalkTalk's CEO has accused BT of hampering the rollout of faster and cheaper broadband services in the UK.

Dido Harding has warned that the fibre broadband market is "fundamentally less competitive" in comparison to its copper equivalent, due to BT's domination of the market.

Harding claimed that BT was a "monopoly provider" of wholesale superfast broadband. With low consumer adoption due to high prices, Harding said that TalkTalk was "hamstrung" from offering better value to their customers. BT has refuted her claims.

Competition regulations pushed communications watchdog Ofcom to intervene in 2010, which resulted in BT offering rivals free and equal access to its copper network for broadband services to open the market.

Following this, broadband prices have halved due to competition, according to Harding. But BT's ownership of the fibre market is now a cause for concern, she said.

"BT's market share is double what it has in copper, take-up is still lower than you might expect and by pricing it at a premium, BT is driving up costs for families and businesses when they can least afford it," she claimed.

Harding has asked Ofcom to regulate the disparity between margin requirements between the price a firm sells wholesale to competitors and the price it charges consumers.

"That is an essential step towards guaranteeing a competitive market," she said.

The CEO also suggested that up to £1.5 billion of public sector money should be handed to BT to build a national infrastructure asset that "a significant portion of society cannot afford to access".

Her letter follows recent comments from BT's head of consumer division, John Petter, in which he added fuel to the fibre regulation debate during an interview.

He told the Telegraph: "It's very striking that the CEO of TalkTalk by her own admission has said to investors that fibre is profitable for them. She's told quite a different story to the regulator and I think that has to catch up with them sooner or later."

Ofcom dropped an investigation into BT's wholesale and retail broadband prices following a complaint from TalkTalk last year.

BT response
BT said that Harding overlooks the fact that Ofcom recently investigated the allegation of a 'margin squeeze' and dismissed the complaint.

"Ofcom said BT's current fibre pricing does not raise any concerns," BT said.

"BT Group has invested £2.5 billion of shareholders' money building a superfast broadband network, even though it will not make a financial return for many years. Ofcom recognises that BT should be allowed to make a fair return on this huge, long term investment into a high speed broadband infrastructure that will benefit the nation. And we don't believe it is part of Ofcom's remit to give large, profitable companies, such as TalkTalk, a leg-up in superfast broadband."

 

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