WLA review – BT financial impact

BT notes the publication of Ofcom’s Wholesale Local Access review (WLA) draft statement this morning.

Today’s statement from Ofcom gives us certainty on the pricing of key products for the next three years.

BT estimates that the price changes in today’s Ofcom WLA draft statement, for the directly charge controlled products, will have a year on year adverse financial impact on Openreach’s revenue and profit in 2018/19 in the range £80m - £120m. There will be further year on year impacts on Openreach, resulting from price reductions to the directly charge controlled products, in each of the successive two financial years in the range of low to mid tens of millions of pounds. Additionally, Openreach’s cost base will increase as a result of meeting the more demanding minimum service levels required in WLA markets.

BT anticipates a further adverse financial impact on Openreach’s revenue and profit as a result of market pressure on the wholesale prices of other products not directly charge controlled in the WLA draft statement.

The net impact at the Group level will depend on the retail market dynamics.

We are considering the implications for full and fair competition of the restriction on BT’s ability to vary its FTTC and G.fast wholesale rental charges between different geographic areas.

We can now look forward and get on with the job of making fibre-to-the-premises broadband available to three million homes and business by the end of 2020.