Britain allows BT to discount wholesale fibre broadband

·2 min read
Company's logo is displayed at British Telecom (BT) headquarters in London

By Paul Sandle

LONDON (Reuters) -British telecoms regulator Ofcom gave BT the green light to offer discounted wholesale fibre pricing to broadband providers, saying the plan to drive uptake of faster connectivity was not anti-competitive.

BT, the country's largest broadband and mobile operator, wants to offer discounts to retail providers including Sky, Vodafone and TalkTalk in return for moving customers to the national fibre network it is building.

The plan, called Equinox 2, was opposed by competing network Virgin Media O2 and new fibre builders known as "altnets".

"Our overriding objective is to bring better broadband to people across the UK, by promoting competitive investment in high-speed networks and making sure there's a level playing field for all companies," an Ofcom spokesperson said.

"With this in mind, and based on the evidence available to us, we don't consider (BT) Openreach's new pricing discounts to be anti-competitive."

Ofcom delayed its decision in March after concerns were raised over BT's boss saying the company's fibre network expansion would "end in tears" for some of its competitors.

That sent its shares down 4% on the day, with investors unnerved by anything that would deter broadband providers from moving customers on to BT's fibre network, helping to underpin the multi-billion pound build.

The regulator had also said it needed more time to consider the large number of responses it had received.

Shares in BT rose 0.1% to 149 pence on Wednesday, a day after Franco-Israeli billionaire Patrick Drahi increased his stake to 24.5%.

Katie Milligan, Openreach's chief commercial officer, said the decision was "good news for customers as it means lower prices and long-term certainty – encouraging the switch to faster, more reliable broadband connections".

Virgin Media O2 said supporting investment was crucial for Ofcom to meet its own strategic priorities to drive fixed network competition at scale.

"While we're pleased Ofcom took more time to review these proposals, it must be prepared to act decisively in future to keep BT in check and protect its own long-term objectives," a spokesperson said.

(Reporting by Paul Sandle; editing by Kate Holton and Jason Neely)