British Telecommunications PLC (BT) will outline its plans for “significant” price cuts on its wholesale broadband services within the next two weeks, BT’s new chief executive officer Ben Verwaayen said Thursday.
Speaking at a news conference to report financial results for the third quarter ending Dec. 31 for its holding company, BT Group PLC, Verwaayen repeatedly declined to elaborate on just how large the wholesale cost cuts would be and if they would also apply to BT’s own broadband retail product.
“Broadband is very important for BT, it is our future and we pledge our commitment to broadband. Wholesale customers are also very important to us, even if they then — through the nature of the business — turn around and compete directly with BT on a retail level,” Verwaayen said.
When BT does outline the details of its broadband price cuts in “a couple weeks,” it would be made clear then that it would “involve a substantial cost reduction on the wholesale side to allow all partners to have a fundamental re-pricing,” he added.
Local media reports earlier in the week said sources inside of the company have indicated that the price cuts could be as much as 50 per cent.
“I’ve talked in abstract terminology on purpose. What I can say is that we will cooperate with the regulator (U.K. national telecommunication regulator, the Office of Telecommunications, also known as Oftel). The regulatory environment is changing because of the changes in the market. I have great respect for the regulator, but he has his role and I have mine. I am not a semi-regulator, but let me make it clear, we will comply with regulation. That is a given,” Verwaayen said.
According to a spokesman at Oftel, BT would have to give the regulator 28 days notice before cutting its broadband prices. As of Monday, Oftel had yet to be contacted by BT about any such plans, the spokesman said.
Verwaayen said he was pleased to see that BT had beat expectations for its third quarter and that it was a good basis for continuing the company’s recovery.
BT Group reported a pretax profit excluding one-off items of