Ofcom has told BT to delay wholesale price cuts after the telecoms giant’s boss said the race to roll out full-fibre broadband would “end in tears” for rivals.
The regulator had provisionally said it would approve a new price plan by Openreach, BT’s network division, that would reduce the fees paid by providers such as TalkTalk and Sky.
But in an update on Friday, Ofcom said it was extending its investigation by two months over fears BT could “distort competition in the market”. The move will force BT to delay its new price scheme – dubbed Equinox II – from its original launch date of April 1.
It comes after BT chief executive Philip Jansen described his company’s network as an “unstoppable machine” and said the UK’s high-speed broadband push would “end in tears” for many rivals.
He told the Financial Times: “There is only going to be one national network. Why do you need to have multiple providers?”
In a letter to Ofcom boss Melanie Dawes, Mr Jansen insisted his comments had been taken out of context and said he was “extremely disappointed”.
But Ms Dawes said the article caused “significant concern”, adding: “Were it to become apparent that BT is able… to distort competition in the market, we would not hesitate to take regulatory action to address this.”
Mr Jansen’s comments sparked a furious response from rivals, who have accused BT of trying to undercut them by locking customers into longer deals with lower prices.
One industry executive said: “This is the equivalent of Philip saying he’s vegetarian after winning a rib eating competition.
“Ofcom should worry less about whether Philip was misquoted and focus on the real intent from BT, which is to squeeze competition and build as many barriers as possible to deter providers from switching networks.”
James Fredrickson, policy director at challenger broadband firm Hyperoptic, said: “It’s telling that the Ofcom chief executive has given such short shrift to Mr Jansen’s claims to have been misquoted.
“The BT chief executive’s position is clear; his comments questioning the need for competition and claiming there will only be one national network openly signal BT’s desire to reinforce its monopoly dominance. No back peddling letter to Ofcom is going to hide that.”
A spokesman for Openreach said: “Whilst we continue to share Ofcom’s initial view that our offer isn’t anti-competitive, it’s important the regulator has time to consider all the feedback it has received fully and fairly, so our discounted full fibre prices won’t come into effect on 1st April.
“Our offer is a response to customers, who want lower prices and long-term certainty to help them switch to faster, more reliable broadband connections. It also supports our continued multi-billion pound investment to upgrade the UK’s broadband infrastructure.”
Openreach added that if Ofcom approves Equinox II in May, it would back-date the price cuts for customers to April 1.