BT accused by Sky and TalkTalk of unfair accounting practices

27th Nov 2013 09:09

BT Group has been reported to telecoms regulator Ofcom for unfairly charging rivals BSkyB and TalkTalk too much for consumer internet and phone lines.Ofcom's review into the fixed line broadband and phone services market has required BT to explain any changes to how costs are allocated in its annual accounts.After analysing BT's regulatory submission to Ofcom's review process, TalkTalk has alleged that BT had used "accounting tricks" to shift around £120m worth of unusual costs from businesses onto consumer broadband and phone lines.TalkTalk has suggested that the annual cost of a single unbundled consumer line could increase by £7.31 to £109.88.According a report in the The Daily Telegraph, some of the costs include £21m of claims compensation, an annual sum of £10m for BT's longstanding no-compulsory-redundancy policy, and £67m from a reorganisation of BT's Technology, Service & Operations.A TalkTalk spokeswoman said: "It is simply wrong that BT is using accounting tricks that will increase people's bills."TalkTalk said part of the impact of BT's accounting practices was to shift costs from business products, where price controls were set last year, to consumer products, which are not set until the coming spring. If Ofcom did not block its proposals, BT would have "double-recovered" its costs, TalkTalk alleged.BT did not address the allegations specifically but countered that it had been transparent as the changes had been published some months ago. "The UK has one of the most heavily regulated telecoms markets in the world and our wholesale prices are amongst the lowest in Europe" a spokeswoman from BT said."There is intense competition at the retail level, something TalkTalk recognise themselves. Consumers have been getting fantastic value for money with broadband prices falling whilst speeds have been rising."Shares in BT were down 0.38% to 370.8p, while those in TalkTalk were up 0.89% to 268.88p at 10:40 on Wednesday.OH