As one of the world’s largest telecommunications groups, British Telecom (BT) faces intense scrutiny whenever concerns about market dominance arise. A recent report from the Commons Public Accounts Committee has again put BT in the spotlight, alleging that the company has been given an unfair advantage in the rollout of superfast broadband across rural areas—an outcome the committee attributes largely to government mismanagement.
The Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts, criticized the Department for Culture, Media and Sport for its handling of the programme. “The programme to extend superfast broadband to rural areas has been mismanaged by the Department for Culture, Media and Sport,” she said. According to the committee, the way contracts were awarded has effectively placed BT in a quasi‑monopolistic position.
The report highlights that BT’s dominant role is being used to restrict access to critical cost and rollout information, limiting transparency and undermining competition. “Consumers are not receiving the full benefits of healthy competition,” the committee warned, noting that assets built using £1.2 billion of public funding could end up owned by BT.
By June 2013, all 26 contracts awarded under the rural broadband programme had gone to BT, with an additional 18 contracts likely to follow the same path. The report recommends that the Department should halt further spending of an additional £250 million until it implements measures to ensure proper competition and value for money for efforts to improve superfast broadband beyond 2015.
BT responded to the criticism by stating that it had been transparent about its role and willing to invest where others would not. The company told The Register that it was “mystifying” to be criticized for accepting strict contractual terms in exchange for public subsidy—terms the company says deterred other potential bidders.
The report’s findings have stirred political debate about the relationship between industry leaders and government. Ian Livingston, BT’s chief executive when the contracts were signed, has faced scrutiny after being appointed to the House of Lords and named a trade minister. Questions were raised about his departure from BT—during which he received shares and other compensation totaling millions—and whether that raised potential conflicts of interest.
Separately, BT has faced criticism over recent consumer price increases. Rival provider Direct Save Telecom, known for low-cost broadband and phone services, publicly condemned BT’s decision to raise prices by an average of 6.5 percent across various services in the coming year. The increases reportedly affect line rental, answerphone services, and even charges for the speaking clock.
While other providers such as Sky, Virgin Media, and TalkTalk have also announced price rises, Direct Save Telecom emphasized BT’s financial performance—citing a reported £2.5 billion profit for the year up to April—as well as concerns about customer protections following price-change notifications. Under current rules, customers typically have only a 10‑day window to switch providers after being notified of a price increase; otherwise they may face higher termination charges, some contracts allowing fees up to 30 percent.
Stavros Tsolakis, CEO of Direct Save Telecom, argued that these price increases were inevitable as companies sought to recoup costs. “Millions will be affected by higher prices, which for many households could mean additional financial hardship,” he said, criticizing the timing and scale of the increases.
A BT spokesperson told TelecomsTech that prices are reviewed annually because the market remains highly competitive. “While some prices may rise, others fall or stay the same,” the spokesperson said, noting that average call bills for BT customers have fallen by 14 percent over the past five years due to lower‑priced inclusive call plans. The company encouraged customers to switch to those plans where possible to save money.
Public debate around BT’s role in rural broadband and its consumer pricing strategy underscores broader questions about how to balance public investment, competition, and consumer protection in the telecoms sector. The Commons committee’s recommendation to pause further public spending until stronger competition safeguards are in place could prompt changes in how future contracts are awarded and how regulators and government departments oversee major infrastructure programmes.
What do you think of the accusations that BT holds a monopoly in the industry and of the recent price increases affecting consumers?