22nd Mar 2016 14:17
LONDON (Alliance News) - BT Group PLC was the target of further action from UK media and communications regulator Ofcom on Tuesday as it faced criticism over its performance on business services.
Ofcom tabled new rules designed to prod BT to improve its performance in installing high-speed business lines and to significantly cut the wholesale prices the telecoms group charges for those lines. The changes are part of Ofcom's Connectivity Market Review, which will be finalised in April, subject to consideration by the European Commission.
First in Ofcom's sights was leased lines. The regulator conceded leased lines often need "complex, bespoke installations" and said the completion of this work can be effected by external factors such as street works or difficulties in accessing premises.
However, the regulator said BT is taking too long to install leased lines and is failing to provide "adequate certainty" the services will be provided by the first date given to the customer. Ofcom also found BT's Openreach network infrastructure arm was failing to complete one in four leased line installation on the initial date promised to its customers.
Therefore, Ofcom has set out requirements for Openreach to complete 80% of leased line orders on time by the end of March 2017, rising to 90% by April 2018.
In addition, Openreach will have to fix at least 94% of faults on its leased line network within five years.
Ofcom also plans to get BT to cut the wholesale prices charged for leased-line services. The regulator expects to bring the charges down over a three-year period from May 2016.
Ofcom has set a 12% initial reduction in prices for Ethernet services with bandwidths up to and including 1 gigabyte, with 9.0% reductions to be put on bandwidths up to 8 megabits.
As part of the strategic review of the UK communications environment, Ofcom also said it will require BT to provide access to its optical fibre network for rival providers of high-speed leased lines, part of a push to cut the UK's reliance on Openreach.
BT is already required to offer wholesale leased line products which bundle the optical fibre and BT's own network equipment at regulated prices to its competitors. But the new steps will go further, requiring BT to allow operators to use its fibre-optic cables with their own equipment, rather than relying on BT's.
Ofcom's new plans were tabled as Ed Vaizey, the UK culture secretary, wrote to broadband providers in the UK to ask them to attend a meeting to discuss scrapping charges to homeowners for landlines if they do not use the line.
One in five homeowners in the UK do not make fixed line calls but still have to pay the monthly landline connection rental fee.
Vaizey has written to BT, TalkTalk Telecom Group PLC, Virgin Media and Sky PLC to request a meeting to discuss the issue.
He said the landline charges were "outdated" and, in future, householders should only pay charges for services they actually use. He claimed the landline charges represent an "analogue billing system in a digital world".
BT shares were down 1.2% to 444.05 pence on Tuesday.
By Sam Unsted; [email protected]; @SamUAtAlliance
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
SkyBTTALK.L