Ofcom seeks more financial disclosure from BT
Regulator demands more detailed financial reports from the telecoms giant
Dissatisfaction with the quality of financial information provided by BT has prompted the Office of Communications to demand more detailed reports from the telecoms giant.
Last week, Ofcom opened up a consultation proposing that BT provides ‘a significant new layer of regulatory financial information’. The regulator said it needed the information to ensure it is better equipped to investigate BT should it need to do so in the future.
An Ofcom spokesman said the consultation proposals would provide assurance for client companies that BT was not abusing its ‘dominant’ position. ‘The new level of financial reporting will focus on the wholesale part of BT’s business, so that Ofcom can establish that BT’s prices are cost-orientated and not based on its dominant market position,’ the Ofcom spokesman said.
Signs have emerged that BT and Ofcom have begun to clash over the issue.
BT said the consultation was merely a ‘rationalisation’ of changes to the company’s regulatory framework made in 2004, when it introduced a new reporting regime to comply with EC directives.
‘The information has always been available to Ofcom in paper form. This consultation is about providing the financial information in an electronic format as opposed to the paper format. It’s as simple as that,’ a BT spokeswomen said.
Ofcom, however, has been frustrated with the availability of financial information from the telecoms giant.
In the consultation document Ofcom said the regulatory financial statements provided by BT were ‘less relevant’ for its investigations as they had been ‘prepared and audited at a less granular level’ than required.
The regulator said: ‘The information requirements have typically been met by an iterative process of information requests, which is slow and can give rise to misunderstandings.’
Ofcom’s BT consultation document said: ‘Ofcom is encouraged by the spirit of co-operation it has received from BT in looking at better ways of allowing Ofcom to perform its role. Taken together these proposals are expected to create a significant step forward in financial transparency while at the same time addressing BT?s concerns relating to the incremental cost burden of regulatory financial reporting.’