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BT's pension deficit could mean higher prices for all

Businesses and consumers could face price hikes if BT is allowed to touch competitors to help reduce its £9.4bn pension deficit.

Telecoms regulator...

Businesses and consumers could face price hikes if BT is allowed to touch competitors to help reduce its £9.4bn pension deficit.

Telecoms regulator Ofcom has published a consultation document saying that if BT is allowed to go ahead, the wholesale charges for renting copper-based landlines could rise by 4%.

Competitors such as British Sky Broadcasting and Carphone Warehouse could then potentially pass these increases on to end-users, according to the Financial Times.

Ofcom sets the prices that BT's Openreach wholesale access division can levy on companies that rent BT's copper-based landlines to provide phone and broadband services.

BT disclosed last month in interim results that its pension deficit had rocketed to £9.4bn at the end of September, up from £5.8bn in July.

The regulator is consulting on whether Openreach's charges should include some of the cost of servicing BT's pension deficit.

Ofcom said the move would be in line with other watchdogs covering the electricity, gas, water and postal industries, which allow companies to include some of the cost of servicing their pension deficits in their regulated charges.

The regulator said it will publish a second consultation document on the issue next year with the aim of reaching a final conclusion.

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