BT pledges further investment in Ofcom plea

UK telco BT has inevitably responded to the calls for it to be broken up as Ofcom closes the public consultation phase of its big strategic review.

The lengthy submission focused on the need to build on the £20 billion of investment BT claims to have made over the past decade in order to secure the UK’s digital future.

Addressing the most contentious part of its business – fixed line wholesale provider Openreach – BT even went so far as to insist “…it is vital for the digital health of the UK that Openreach remains part of the wider BT Group as this will enable it to continue to benefit from BT’s capital as well as the c.£500m a year BT spends on its world class research and development.”

There are a bunch of stats illustrating how well the UK is doing, compared to other developed economies, when it comes to digital infrastructure. The inference here is that this is largely due to BT’s efforts and risks being undone if Ofcom interferes too much.

BT also couldn’t resist renewing its counter-attack on key antagonist Sky, which has led the calls for Openreach to be taken away from BT and which is arguably its biggest UK multiplay competitor.

“BT’s submission highlights the continuing problems in the Pay TV market, where Sky’s dominance continues to be unchecked and where new rules are needed to make switching far easier for customers,” said the announcement. Going on to accuse regulation of being lop-sided in favour of Sky, since BT struggles to get wholesale content deals from Sky.

BT Group chief executive Gavin Patterson said, “We are now at a critical point in the development of the UK as a digital nation. Broadband has become central to our economic and social life today and the industry must therefore invest to meet this growth in customer expectations and demand.

“BT is driving the transformation of Britain’s digital infrastructure but we need the right regulatory regime that supports fair competition for all and large scale investment,” said BT Group chief exec Gavin Patterson. “With this in place, there is no doubt that we can meet the challenges of the next decade, fulfilling the needs of consumers and businesses, driving the growth of the UK economy and supporting social progress for the whole country.

“Ofcom has the opportunity to level the playing field by tackling Sky’s dominance of Pay TV. That dominance has led to poor outcomes for UK consumers and it is about time that converged regulation was introduced to deal with a converged market. The current lop-sided approach isn’t serving customers well.”

Some strong words there, and the last of the public submissions to the Ofcom review. The regulator will now go off and mull things over for a couple of months before announcing its strategy for UK telecoms for the next decade. All eyes will be on what it decides to do with Openreach and the smart money is in BT keeping hold of it after further concessions.

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