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TalkTalk renews call for BT breakup as it warns over broadband competition TalkTalk renews call for BT breakup as it warns over broadband competition
(about 7 hours later)
TalkTalk has renewed calls for regulators to break up BT and move its broadband and telephone network into a separate company.TalkTalk has renewed calls for regulators to break up BT and move its broadband and telephone network into a separate company.
Dido Harding, chief executive of the budget pay TV and broadband operator, said radical action was needed to “prevent the future of the UK’s digital infrastructure from being held to ransom”.Dido Harding, chief executive of the budget pay TV and broadband operator, said radical action was needed to “prevent the future of the UK’s digital infrastructure from being held to ransom”.
She spoke as TalkTalk unveiled a slowdown in first quarter revenues and “softer” broadband takeup, blaming the price war between BT and Sky, whose rival sports channels are being backed with heavy discounts.She spoke as TalkTalk unveiled a slowdown in first quarter revenues and “softer” broadband takeup, blaming the price war between BT and Sky, whose rival sports channels are being backed with heavy discounts.
Lady Harding reiterated TalkTalk was on track to meet its full-year revenue growth target of 5%, but said growth in the three months to 30 June had been just 3.5%. Shares fell 8% to 360p in morning trading as the company warned: “The broadband market was softer than we have seen in recent quarters, with higher promotional activity in the sector.”Lady Harding reiterated TalkTalk was on track to meet its full-year revenue growth target of 5%, but said growth in the three months to 30 June had been just 3.5%. Shares fell 8% to 360p in morning trading as the company warned: “The broadband market was softer than we have seen in recent quarters, with higher promotional activity in the sector.”
The regulator Ofcom has floated the possibility of structural separation for BT as part of its first strategic review of the telecoms market for a decade. BT’s Openreach unit is in charge of the UK’s largest network of copper and fibre-optic telephone and broadband lines, and is used by rival broadband providers like Sky and TalkTalk , and by mobile phone companies to connect their masts.The regulator Ofcom has floated the possibility of structural separation for BT as part of its first strategic review of the telecoms market for a decade. BT’s Openreach unit is in charge of the UK’s largest network of copper and fibre-optic telephone and broadband lines, and is used by rival broadband providers like Sky and TalkTalk , and by mobile phone companies to connect their masts.
Mobile and broadband companies have been calling for regulators to intervene since BT agreed a takeover of EE, the UK’s largest mobile operator. BT wants to emulate European operators by offering so-called quad-play: a combination of TV, broadband, landline and mobile.Mobile and broadband companies have been calling for regulators to intervene since BT agreed a takeover of EE, the UK’s largest mobile operator. BT wants to emulate European operators by offering so-called quad-play: a combination of TV, broadband, landline and mobile.
Harding said: “We remain deeply concerned by current consolidation proposals in the UK, which will inevitably stifle competition and lead to increased prices and reduced innovation for consumers, as demonstrated in other European mobile markets, including Ireland. We were encouraged by Ofcom’s recent consultation paper on its strategic market review, and we reiterate our call for regulators to make the most of the opportunity to take bold, radical action, such as the separation of Openreach. It is increasingly clear that this is the only way to prevent the future of the UK’s digital infrastructure from being held to ransom.”Harding said: “We remain deeply concerned by current consolidation proposals in the UK, which will inevitably stifle competition and lead to increased prices and reduced innovation for consumers, as demonstrated in other European mobile markets, including Ireland. We were encouraged by Ofcom’s recent consultation paper on its strategic market review, and we reiterate our call for regulators to make the most of the opportunity to take bold, radical action, such as the separation of Openreach. It is increasingly clear that this is the only way to prevent the future of the UK’s digital infrastructure from being held to ransom.”
Last week BT’s chief executive, Gavin Patterson, threatened a decade of litigation and an end to much-needed further investment in the broadband network if Ofcom recommends a breakup.Last week BT’s chief executive, Gavin Patterson, threatened a decade of litigation and an end to much-needed further investment in the broadband network if Ofcom recommends a breakup.
The newly installed Ofcom chief executive, Sharon White, brushed off the threats on Tuesday, telling MPs in evidence to parliament’s culture, media and sport select committee: “I can’t say I am easily intimidated.” She said the final decision on BT may need to be taken by European regulators. The newly installed Ofcom chief executive, Sharon White, brushed off the threats on Tuesday, telling MPs in evidence to parliament’s culture, media and sport select committee: “I can’t say I am easily intimidated.”