BT rivals decry request to pass on pension burden
BT has nobody to blame but itself for its £8.8 billion (€9.81 billion) pensions fund deficit, and should not be allowed to pass the burden onto others, its competitors have said.
UK operators BSkyB, C&W and Carphone Warehouse have all submitted angry responses in reply to a request by regulator Ofcom for submissions over whether BT should be allowed to pass some of the costs of bridging the pension gap onto its wholesale charges.
Under the proposal, BT would be entitled to increase its wholesale charges by 4%.
The responses, which have been seen by the Financial Times prior to going public today, argue that BT is the sole architect of the deficit.
C&W reportedly said it had conducted research which proves that BT's attempt to “persuade Ofcom that its deficit is in some way an act of God” rang false.
BT has had a pension shortfall since its privatisation in 1984, but the gap got bigger in the 1990s due to improper funding of an early retirement scheme, the statement added.
BT intends to release its response to the consultation today.
Credit ratings agency Standard and Poor's last month downgraded BT's credit rating to triple B minus over the pensions deficit.