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Rivals assail BT over pensions deficit

02 Mar 2010
00:00
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BT has nobody to blame but itself for its £8.8 billion ($13.2b) 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 made submissions to regulator Ofcom 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 on March 1, 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 privatization in 1984, but the gap widened in the 1990s due to improper funding of an early retirement scheme, the statement added.

BT planned to release its response to the consultation on March 1.

Credit ratings agency Standard and Poor's last month downgraded BT's credit rating to triple B minus over the pensions deficit.

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