The head of BT’s consumer arm has urged Ofcom to expand its review into the UK’s telecoms market to cover pay-TV firms.
Ofcom announced its review in March after BT confirmed plans to buy EE and the owners of Three confirmed they were bidding to buy up O2.
The regulator said its investigation would cover “both fixed and wireless networks and services” and was designed “to promote competition and to support continued investment and innovation that can benefit consumers and businesses in the form of coverage, choice, price and quality of service.”
Addressing members of the Broadcasting Press Guild, Petter claimed that while rising competition in the phone and broadband market has led to lower prices for consumers, pay-TV customers are paying between £50-£75 more per year than their mainland European counterparts.
He said: “Whereas in the energy market regulators have criticised the Big Six operators, in pay TV Sky has a 64 per cent share, so there is really only the Big One. Relative to EU averages Sky customers are paying around a half a billion pounds more per year for the basic packages of pay TV channels.
“Switching in pay TV is 50 per cent lower than the levels seen in broadband, so it is clear we just aren’t seeing the right levels of competition for Sky”.
Petter said that although BT has ploughed billions of pounds into its own sports channels, the investment “hadn’t changed the overall market dynamics given the dominance of Sky” and suggested many of BT Sport’s 2.4 million viewers were people who’d never watched Sky Sports.
This, he claimed, was evidence of “a large unserved part of the population unable to pay the high prices demanded by Sky” and repeated claims that a lack of wholesale obligations for the provision of Sky Sports 3-5 and F1 mean the satellite firm’s rivals were unable to compete from a position of strength.
Responding to Petter’s comments, a spokesperson for Sky said: “The reality is that, in a competitive market, customers are choosing Sky in greater numbers and staying with us for longer because of the quality and value that we offer,”
“It is strange to hear BT talk about high prices when they are about to increase the price of BT Sport for Sky TV customers by 48pc. This looks like an attempt to deflect attention from the real problems that exist in broadband, where consumers are suffering because of BT’s under-investment and there is concern about competition in the future.”