BT accused of stifling innovation in stinging attack by C&W chief

Cable & Wireless launched a furious attack on BT Group yesterday at a meeting called by MPs investigating the role of communications and technology in the UK economy.

Cable & Wireless launched a furious attack on BT Group yesterday at a meeting called by MPs investigating the role of communications and technology in the UK economy.

The attack, led by Francesco Caio, the chief executive of C&W, accused BT of "stifling innovation" among its competitors. He also took a swipe at government and previous industry regulators for "protectionist policies".

Mr Caio told the Trade and Industry Select Committee that the roll-out of broadband, known as DSL, had suffered at the hands of BT, which had also put barriers in the way of rivals starting up residential fixed-line services, so-called carrier pre-select (CPS) suppliers.

"BT has around 1 million DSL subscribers, many sold through businesses like us that buy their product wholesale and resell it. But doing so has been a frustrating process as they [BT] have failed to provide either certainty of supply or pricing," Mr Caio said. He said it had taken BT four years to put together its CPS offer "when this was not like putting a man on the moon". A spokesman for BT said that Mr Caio was guilty of an "old-fashioned moan" and had got his facts wrong.

After 20 years, said Mr Caio, the regulatory regime in the UK "has failed to deliver true competition in telecoms, nor therefore the full benefits of ICT," estimated by C&W at £20bn.

However, Mr Caio stopped short of attacking the new telecoms regulator, Ofcom, which is conducting a review of telecoms regulation.

"[We] believe under Ofcom the UK regulatory climate can only get better," Mr Caio said.

However, he pulled no punches when attacking BT. "The UK has lost its pre-eminent position as a pioneer of liberalisation," he told MPs.

"The UK was at the forefront of competition in telecoms 20 years ago. But in recent years we have lagged behind. In broadband take-up, this country now has a competitive disadvantage against others. Germany has almost 5 million DSL subscribers, France has 4 million, Italy 3 million and the UK just 2 million.

"BT has paced its broadband roll-out according to its preferred plan rather than according to the pace of the market."

BT hit back, dismissing Mr Caio's claims as being out of date. A BT spokesman said: "I think it's disappointing that they [C&W] are being as negative as this at a time when I think an awful lot of the UK are saying 'right, let's move forward'. I just think they are way out of whack on this. I wouldn't have been surprised if this was an archive from four years previous but now it's really out of date. We reject his analysis of the market fully."