Mercury furious at BT ruling

PETER RODGERS

Business Editor

Mercury Communications yesterday said it was appalled by a ruling by Don Cruickshank, the telecoms regulator, that would make competitors pay for part of the cost of BT's redundancy schemes.

Mercury was commenting on Mr Cruickshank's announcement of the amount other operators will have to pay BT as interconnection charges to use its network.

A Mercury spokesman said the company had been assured two months ago that other operators would not be required to contribute to BT's redundancy costs. "We don't know what changed his mind," said the company.

Peter Howell-Davies, chief executive of Mercury, said BT would also be allowed under the new ruling to claw back money it has spent maintaining empty accommodation and on running the office of the chairman, Sir Iain Vallance.

Mr Howell-Davies said: "I am appalled that Oftel [the regulator] should feel BT deserves special treatment as competition is a fact of life for all operators. Many have used redundancy to improve their efficiency and reduce costs in the face of that competition."

The costs of those cuts were normally borne by a company and its shareholders and not by customers and competitors, he added. Mr Howell-Davies complained that BT's employee relations director had said in 1992 that the cost of the company's "Release" redundancy plan had been pitched higher than necessary, to persuade more people to leave BT.

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