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BT has been given a warning by industry regulator Ofcom, after it emerged the provider had billed £1.7 million from its merger with EE to its Openreach division.

Openreach, which maintains and manages access to BT's national broadband and phone network, is meant to be at arm's length from the provider.

The relationship between BT and Openreach has been the subject of a numerous complaints from rivals, many of which have urged Ofcom to examine the link between the two parties in its latest Strategic Review.

Companies such as TalkTalk, Sky Broadband and Vodafone have often levelled accusations relating to BT shifting unnecessary costs on to Openreach.

While such a move is often not cause for concern, Ofcom's latest Business Connectivity Review now appears to have found at least one incident where BT has seemingly crossed the line.

In its resulting Consultation Document, Ofcom claimed: "BT’s statutory financial statements show that amongst the various ‘specific items’ that affected BT’s operating costs and net finance expenses in 2014/15 was a £26 million charge for EE Acquisition costs."

The regulator added that BT had provided a breakdown of how costs had been allocated to business connectivity services "together with an explanation for the allocation".

It found that £1.3 million had been allocated to Ethernet services during the 2014/15 period, while £400,000 was set aside for TI services.

Ofcom said BT had claimed the EE Acquisition costs were included within activity group AG112 (Corporate overheads) and AG113 (Total Liquid Funds and Assets).

"We consider that BT’s EE Acquisition costs are incurred as a result of the activities associated with the acquisition of EE," the Consultation Document added.

"However, BT attributes these costs across all UK lines of business, including, for example, Openreach and BT Wholesale to which we do not consider these costs relate.

"We do not consider that this is consistent with the Regulatory Accounting Principle of causality and therefore we consider this attribution inappropriate.

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