Ofcom have told BT that they can’t raise the wholesale prices of it’s broadband and landline services to help cover the pension costs that BT are having to pay.
BT are having to pay in the region of £5.2 billion per year in pension contributions with this to rise to around £5.8 billion in a few years. BT wanted to help fund it’s pensions deficit by charging the companies who use it’s equipment on a wholesale level more, but Ofcom have stood by their current approach and refused to allow BT to charge more for wholesale access.
An Ofcom statement said:
“Ofcom sets the prices that Openreach, BT’s wholesale access division, can charge other communications providers to deliver services to consumers. Regulatory controls also apply to certain other services provided by BT Wholesale such as leased lines*.
BT’s pension deficit contributions have increased in recent years and Ofcom has considered whether there are good reasons for changing the way that it currently treats BT’s pension costs. At present Ofcom allows for ongoing pension service costs, as reported in BT’s statutory accounts, but excludes payments made by BT in respect of any pension fund deficit.
After considering the evidence, including responses from stakeholders, Ofcom has decided to maintain its current approach.“