BT faces backlash over price hikes to plug pensions hole

BT faces customer exodus and brand damage if it raises Openreach charges.

BT faces a major backlash from its Openreach customers if it goes ahead with a charges increase to cover a shortfall in its pension scheme, branding experts have warned.

The company is the subject of an Ofcom consultation, which could force it to raise prices in order to fill its pension gap. If it goes ahead, the price rises could also affect companies that lease their phonelines such as Carphone Warehouse and BSkyB

Ofcom says BT may have to increase bills by up to 4% for its Openreach customers, who include some smaller businesses as well as commercial rivals. Stakeholders will now have to decide if the telecoms provider should raise charges.

Nicholas McEldery of telecoms branding experts Octus says price rises would alienate rivals’ customers and would cause a fierce backlash.

“Not only would this diminish BT as a brand, but its rivals, who have worked so hard to offer consumers something different, would also suffer in the long term. It would be the worst branding decision to go ahead with something so controversial to fill a pensions gap that is not even remotely related to its customers. Its business customers will definitely look elsewhere to avoid such unscripted changes that impacts on them heavily,” he says.

A BT statement says the company “considers it entirely reasonable that we should be able to recover an appropriate share of our pension deficit costs through regulated charges”.

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