BT.A Bt Group Plc

--U.K. regulator opens investigation into telecommunications company

--Ofcom is concerned BT might not be correctly complying with regulatory conditions

--BT strongly disagrees with regulator's assessment

By Adria Calatayud

U.K. regulator Ofcom said Thursday that it has opened an investigation into BT Group PLC's compliance with its obligations as a broadband universal service provider.

The regulator said it is concerned the U.K. telecommunications company might not be correctly complying with regulatory conditions where it assesses excess costs for a given connection.

Under rules introduced in 2018, customers can request an upgraded connection from BT if they can't receive affordable broadband services with a certain minimum speed, the regulator said. Ofcom's conditions set out how BT should assess the costs of providing a connection.

The regulator said it will now gather evidence and expects to determine its next steps before the end of the year.

BT shares at 1108 GMT were down 3.3% at 102.50 pence.

In response, BT said it strongly disagrees with Ofcom's assessment of its delivery of the universal service obligation.

"We are disappointed that they have opened an investigation when we're fully committed to working with both Ofcom and the government to find better ways to connect the hardest to reach," a BT spokesperson said.

The FTSE 100 company said it appreciates that universal service obligation quotes can be unaffordable for some of the most remote properties, and said it is working to enable communities to be able to share the costs of connections to drive down costs for individuals.

BT said it is already building connections to 4,000 premises through the universal service obligation program. However, the company said the current approach needs to change, as it doesn't overcome the challenges of connecting the most difficult places, which represent 0.5% of the country.

Write to Adria Calatayud at adria.calatayud@dowjones.com

(END) Dow Jones Newswires

October 15, 2020 07:43 ET (11:43 GMT)

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