Statement regarding BT s regulatory accounts for 05/6
01/11/2016
BT's Regulatory Financial Statements, published last week,1 show that in the last financial year it made returns around 8% above its cost of capital' the cost of financing a business or investment.
Much of this was made by its Openreach infrastructure arm. In recent years, BT has invested in connecting street cabinets to fibre-optic broadband. Ofcom requires BT to provide access to its network for competitors, such as Sky and TalkTalk, to offer their own broadband services.
BT's Regulatory Financial Statements show that, with take-up of superfast broadband increasing, returns in this market are now above its cost of capital, and the company is no longer losing money on the investment.
Ofcom has previously decided against controlling the wholesale prices BT charges to competitors for superfast broadband, to allow the market to grow and encourage further investment by BT.
As we have previously said, we will consider whether regulating BT's wholesale fibre prices is now appropriate, to promote choice and availability of these important services.
Fair regulation for all
Where Ofcom regulates companies and sets limits on the prices they can charge we recognise the riskiness of new investments, which should be adequately rewarded for investment to take place.
This year, Ofcom completed a major review of how BT should in future attribute its costs to regulated services. We decided to reduce the costs that can be recovered through regulated prices in future.
Over time, this will lead to lower prices. The effect will be significantly to reduce BT's returns on its regulated products.
Reflecting this, Ofcom announced new rules earlier this year requiring BT heavily to reduce wholesale charges on its high-speed business lines over the next three years.
These price controls on installing and repairing leased' fibre lines, which are used by larger businesses, came into effect this year. Ofcom estimates the new controls will reduce BT's revenues by £800m over the next three years.
In the most recent financial year, ending in March 2016, these prices controls were not yet in place. Therefore, BT's reported returns have increased as some of its costs have been removed.
Ofcom will continue to scrutinise BT's costs and maintain a balance between allowing BT to become more efficient, and ensuring fair prices for competitors and their customers.
Consumer benefitsRegulation of BT's prices has delivered significant benefits to consumers through innovation, lower prices and encouraging new companies in the market.2
Over the last ten years, regulation has also played an important role in growing the number of broadband providers that people can choose from. With BT's competitors now able to access its network on equal terms, the UK has one of the most competitive markets in Europe.3
However, the importance of broadband to peoples' working and personal lives and their need for a fast, reliable service has never been higher.
So while Openreach's spending on its network has been increasing in recent years, there is a question about whether it will be sufficient in future, as people and businesses demand faster, more reliable connections to support a new generation of online services.
Ofcom wants to see greater investment and improved quality of service across the industry. We will propose new rules around Openreach's repairs and installations in our forthcoming review of this market.
We are also clear that Openreach must become more independent from BT, making investment decisions in the interests of all telecoms companies and their customers.
In July, we proposed a model for how this will work, including greater separation between the management of Openreach and BT Group. We are carefully considering responses to our proposal, and will announce next steps shortly.
ENDS
NOTES
BT is required to publish Regulatory Financial Statements (RFS) four months after its financial year end. However, Ofcom's Business Connectivity Market Review (BCMR) required BT to make significant changes to the way it attributes its costs to regulated services. Ofcom therefore extended the publication deadline to six months after publication of the final BCMR statement for this year. BT was therefore required to publish its 2015/16 RFS by 28 October 2016.
For example, between 2009 and 2015, average broadband speeds quadrupled, but the cost of broadband hardly changed (Ofcom's Consumer Experience report 2015: Research Annex PDF, 609.1 KB ).
The UK ranks fifth for market share of new entrants in broadband in the European Commission's Broadband market developments in the EU 2016.
LINK: | https://www.ofcom.org.uk/about-ofcom/latest/media/media-releases/2016/... |
See more stories from ofcom |
Most recent headlines
04/08/2024
Dalet Appoints Santiago Solanas as CEO to Lead Next Era of Growth and Innovation
Dalet, a leading technology and service provider for media-rich organizations, is excited to announce Santiago Solanas as its new Chief Executive Officer (CEO)....
03/06/2024
Dalet and Veritone Reach Agreement to Distribute, Transact and Monetize Media Archives
Dalet, a leading technology and service provider for media-rich organizations, a...
02/05/2024
Advertisers and Creators Come Together at Our First-Ever Spotify Sparks in London
With more than 600 million users around the world tuned in to Spotify, there'...
02/05/2024
Gear up for the 2024 Cycling Grand Tours on Australia's Home of Cycling, SBS
Gear up for the 2024 Cycling Grand Tours on Australia's Home of Cycling, SBS Media releases All of the rivalry begins with the Giro d'Italia this we...
02/05/2024
New SBS documentary dives into one of Australia's greatest underdog stories of all time!
New SBS documentary dives into one of Australia's greatest underdog stories ...
02/05/2024
Alone Australia cements its place as one of Australia's biggest hits of 2024
Alone Australia cements its place as one of Australia's biggest hits of 2024 2 May, 2024 Media releases Alone Australia has cemented its place as one o...
02/05/2024
The Making of All of Us Strangers
I always like to base my lighting choices in reality, says cinematographer Jamie D. Ramsay, SASC. For his recent collaboration with writer-director Andrew Haig...
02/05/2024
Hiltron Introduces Field-Upgradable Motorisation Kit for CPI 2385 Satcom Antenna
Accompanying image shows Hiltron's new HMAM-based field-upgradable motorisation kit for the CPI 2385 satellite communications antenna. Backnang, Germany,...
02/05/2024
Millennium Space Systems Selects L3Harris to Build Space Development Agency Electro-Optical Infrared Payloads
MELBOURNE, Fla., May 2, 2024 - L3Harris Technologies (NYSE:LHX) has received a c...
02/05/2024
Samba TV Launches New Generative AI Ad Solution
NEW YORK Samba TV is debuting new capabilities for Samba AI, the company's suite of generative AI technologies. Samba AI's new capabilities provide a re...
02/05/2024
Television Academy Foundation Names Anne Vasquez Executive Director
LOS ANGELES The Television Academy Foundation has announced the appointment of Anne Vasquez as its executive director effective May 13....
02/05/2024
SAG-AFTRA to License Nielsen Streaming Data
NEW YORK SAG-AFTRA has inked a deal with Nielsen to become its third-party provider of streaming content measurement and has announced that it will use the Niel...
02/05/2024
Cineverse Unveils Public Beta of AI-Powered cineSearch
LOS ANGELES Cineverse has debuted cineSearch, its previously announced new content search and discovery service in public Beta....
02/05/2024
Can AI find a way to reduce the broadcast industry's energy consumption?
OpenDrives Trevor Morgan asks if AI has the answer to making data centres for the media and entertainment industry more sustainable By Contributor Published:...
02/05/2024
Bill Baggelaar Asks the Questions: An Unfiltered Look at Media Supply Chain Transformation
Bill Baggelaar Asks the Questions: An Unfiltered Look at Media Supply Chain Tran...
02/05/2024
Two Boston Conservatory at Berklee Alums Nominated for Tony Awards
Two Boston Conservatory at Berklee Alums Nominated for Tony Awards An additional eight alums and two current students performed in nominated productions. By...
02/05/2024
Viewers Call Finding New TV Content Frustrating' in Comcast Advertising Report
A majority of viewers 51% said the difficulty in finding new content on TV c...
02/05/2024
Programming Legend Art Moore Retiring After 53 Years With ABC Stations
Art Moore, who headed production of long-running syndicated series, including Live, said he plans to retire in September as VP of programming for WABC New York....
02/05/2024
Nexstar Will Move The CW Affiliation to WGN Chicago
Nexstar Media Group, which owns The CW, said the network's affiliation will be moving to Nexstar-owned WGN Chicago....
02/05/2024
Future Today Puts First Original Shows on Fawesome Channel (NewFronts)
Future Today said that it plans to launch the first original shows on its Fawesome streaming channel....
02/05/2024
Behind the Music' Returns on Paramount Plus
Behind the Music is back on Paramount Plus with new episodes May 1. Those profiled in the season two episodes are Bell Biv DeVoe, Trace Adkins and Wolfgang Van ...
02/05/2024
All American: Homecoming' Returns on The CW July 8
All American: Homecoming starts season three on The CW Monday, July 8, while season two of 61st Street kicks off Monday, July 22....
02/05/2024
Jerry Seinfeld's Pop-Tart Movie Starts on Netflix May 3
Unfrosted, a movie about the race to create a game-changing breakfast pastry, such as, say, the Pop-Tart, debuts on Netflix May 3. Jerry Seinfeld directs, his f...
02/05/2024
Former BT Sport COO Jamie Hindhaugh joins EMG / Gravity Media
Charlie Cubbon has also been appointed chief operating officer By Matthew Corrigan Published: May 2, 2024 Charlie Cubbon has also been appointed chief ope...
02/05/2024
Durable Goods Signs Lionel Coleman
Durable Goods Signs Lionel Coleman Brie Clayton May 2, 2024 0 Comments Durable Goods has signed multi-hyphenate director Lionel Coleman for commercial...
02/05/2024
Hitsujibungaku's Music Video GO!!! Shot by Kyotaro Hayashi with Blackmagic Cinema Camera 6K
Hitsujibungaku's Music Video GO!!! Shot by Kyotaro Hayashi with Blackmagic C...
02/05/2024
Diamond Sports RSNs Go Dark On Comcast Systems
Bally Sports Regional Networks were taken off Comcast's systems on April 30 when their existing distribution agreement expired and Diamond Sports Group was ...
02/05/2024
Diamond Sports Group, DirecTV Renew Distribution Deal
SOUTHPORT, Conn. and EL SEGUNDO, Calif. Diamond Sports Group ( Diamond or the Company ) and DirecTV have announced that they have reached a multi-year renewal...
02/05/2024
Three Nexstar Stations to Become CW Affiliates
IRVING, Texas Nexstar Media Group has announced that its owned and operated television stations in Chicago, Illinois (DMA #3), Norfolk, Virginia (DMA #43), and ...
02/05/2024
FCC, FTC Ink Agreement to Cooperate on Net Neutrality Enforcement
WASHINGTON, D.C. The Federal Communications Commission and Federal Trade Commission have signed a Memorandum of Understanding to coordinate consumer protection ...
02/05/2024
Haivision Celebrates 20th Anniversary
MONTREAL Haivision Systems Inc. is marking its 20th anniversary by detailing some of the accomplishments and developments that have helped the company become a ...
02/05/2024
Agora Introduces Adaptive Video Optimization Technology
SANTA CLARA, Calif. Agora today unveiled its Adaptive Video Optimization (AVO) technology that uses machine learning to adjust parameters dynamically at every s...
02/05/2024
Study: Streaming Market Is Saturated But Subscriptions Continue to Grow
NEW YORK Kantar has released a new study showing the U.S. streaming market has hit a saturation point, with the household penetration rate stagnating and at nea...
02/05/2024
Samba TV To Spotlight New Capabilities For Generative AI Ad Solution
NEW YORK Samba TV is debuting new capabilities for Samba AI, the company's suite of generative AI technologies, at the 2024 IAB (Interactive Advertising Bur...
02/05/2024
GSTV Pumps Up Research, Programming at NewFront
GSTV, the network that programs screens at gas stations, will be talking about new research and new programming at its NewFront presentation Wednesday....
02/05/2024
Rohde & Schwarz presents its test solutions at CCW 2024 that enable a successful migration to mission-critical broadband
Rohde & Schwarz presents its test solutions at CCW 2024 that enable a successful...
02/05/2024
Baselight training. Paris. Les Lapins Bleus. 27-31 May 2024
Baselight accredited training partner, Les Lapins Bleus, is conducting a five day Baselight training course in Paris in May. Location: Paris Dates: 27-31 May ...
02/05/2024
Skeem Saam: Wednesday's episode, 1 May 2024 [video]
Skeem Saam: Wednesday's episode, 1 May 2024 [video]Missed an episode of Skeem Saam? No problem! Watch the latest episode of your favourite South African soa...
02/05/2024
Prison Journalism: It's alright not to have
Prison Journalism: It's alright not to haveWesley Leong was incarcerated at the age of 15 in 1996 at Pollsmoor Prison. He is currently part of Restore's...
02/05/2024
Tonight on Smoke and Mirrors: Thandiswa's quest to reclaim Caesar's house intensifies
Tonight on Smoke and Mirrors: Lulu navigates the complexities of her relationshi...
02/05/2024
GeForce NOW Delivers 24 A-May-zing Games This Month
GeForce NOW brings 24 new games for members this month. Ninja Theory's highly anticipated Senua's Saga: Hellblade II will be coming to the cloud soon -...
02/05/2024
NVIDIA AI Microservices for Drug Discovery, Digital Health Now Integrated With AWS
Harnessing optimized AI models for healthcare is easier than ever as NVIDIA NIM,...
02/05/2024
ARRI announces the ALEXA 35 Live - Multicam System
ARRI announces the ALEXA 35 Live - Multicam System posted: 02/05/2024 Arri Alexa 35 Live - Multicam System ARRI announces the ALEXA 35 Live - Multicam Sy...
02/05/2024
The Women': Author shines light on forgotten women in war
The Women': Author shines light on forgotten women in warThe bestselling author of The Nightingale', Kristin Hannah, has outdone herself with her new h...
02/05/2024
May 01, 2024
New technique improves T cell-based immunotherapies for solid tumors Scripps Research scientists help T cells more effectively kill solid tumors cells in vitro ...
01/05/2024
Release Rundown: What to Watch in May, From I Saw the TV Glow to Power
Owen (Justice Smith) and Maddy (Brigette Lundy-Paine) develop an eerie connection to a supernatural TV show in Jane Schoebrun's I Saw the TV Glow....
01/05/2024
Celebrate May the 4th With Special Star Wars' Playlists, Audiobooks, and More
Spotify's Star Wars celebrations are in full Force starting today, and this ...
01/05/2024
Spotify's New Hardcore Gardening Playlist and Brain Dead Collab Will Rattle Greenhouses Everywhere
All around the world, millions of Spotify fans love listening to hardcore punk m...
01/05/2024
THE CALL FOR THE FIFTH PRESIDENTIAL EMPLOYMENT STIMULUS PROGRAMME (PESP5) FOCUSED ON THE AUDIO-VISUAL INDUSTRY, IS OPEN.
THE CALL FOR THE FIFTH PRESIDENTIAL EMPLOYMENT STIMULUS PROGRAMME (PESP5) FOCUSE...
01/05/2024
QTAKE Pioneers Live 3D Stream to Apple Vision Pro
QTAKE, the leading video assist and on-set collaboration software trusted by professional filmmakers worldwide, launched a new cutting-edge feature at NAB 2024....