BT: Sky Calls For Openreach Separation Are Distraction From Pay TV Dominance

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BT calls for Ofcom’s once in a decade market review to include ‘non-competitive’ pay TV market

BT says Sky’s calls for Openreach to be spun off as a separate entity are merely attempts to distract from the satellite broadcaster’s own dominance of the pay TV market and has called on Ofcom to amend its once in a decade review of the UK communications market to investigate

John Petter, CEO of BT’s consumer division, said the Pay TV market was significantly less competitive than the broadband sector, in which strong competition and regulation had reduced prices for consumers and improved service.

The company claims Sky TV customers are paying close to £50 a more than the EU average for ay TV services, a figure which increases to more than £75 a month if customers take premium sports and movies packages.

BT complaints

Sky dishPetter said the fact that 2.4 million who didn’t previously subscribe to Sky Sports now watched BT Sport and Sky’s price increases were evidence the market isn’t working.

“Whereas in the energy market regulators have criticised the Big Six operators, in pay TV Sky has a 64 per cent share, so there is really only the Big One,” he said. “Relative to EU averages Sky customers are paying around a half a billion pounds more per year for the basic packages of pay TV channels.

“Switching in pay TV is 50 per cent lower than the levels seen in broadband, so it is clear we just aren’t seeing the right levels of competition for Sky.”

Sky’s submission to the Ofcom Digital Communications Review called for Ofcom to ask the Competition and Markets Authority (CMA) to conduct an inquiry into the UK telecoms market, claiming BT’s dominance is thwarting competition and preventing investment in superfast broadband

The Isleworth-based firm alleges Openreach has frequently missed service targets and is preventing other firms from being able to invest in alternative infrastructure that could eventually harm consumers and the national economy

Sky wants Openreach to be separated from BT, an opinion shared by TalkTalk, which claims investment in fibre infrastructure has fallen by 30 percent and fibre wholesale prices are “twice” what should be and that rural businesses and SMBs are being overlooked.

Both Sky and TalkTalk are partners in a fibre to the premise (FTTP) joint-venture in York, which hopes to provide ‘ultrafast’ 1Gbps speeds to homes and businesses and eventually replicate the model to serve 60 percent of the population, providing an alternative to Openreach.

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