BT cannot hike prices to pay for retirement

Steve Dinneen
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BT will not be allowed to increase the amount it charges rivals to use its infrastructure to help plug its pension deficit, communications watchdog Ofcom ruled yesterday.

The move is a blow to the telecoms giant, which had hoped Ofcom would follow the example set by regulators of the postal, energy and water industries, which sometimes allow deficit recovery payments to be included in regulated charges. The decision was welcomed by rivals BSkyB and TalkTalk, which will avoid paying higher prices for the same service. An Ofcom spokesman said: “We believe this is important for creating an environment in which regulated firms, such as BT, and their wholesale customers are willing and able to invest.

“The guidelines meet our principal duty to further the interests of citizens and consumers by promoting competition.”

BT’S mammoth pension deficit fell by £2.9bn last month thanks to a change that links pension payments to the Consumer Prices Index inflation measure instead of the Retail Prices Index. The fall in deficit, which stood at £9bn in 2009, will immediately have an impact on its interest payments.