SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the
Securities Exchange Act of 1934
Date of
Announcement:
27 March
2017
BT Group plc
(Translation
of registrant's name into English)
BT
Group plc
81 Newgate
Street
London
EC1A 7AJ
England
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form
20-F..X...
Form 40-F
Indicate
by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information
to the Commission pursuant to Rule 12g3-2(b) under the Securities
Exchange Act of 1934.
Yes
No ..X..
This announcement contains inside information.
March 26, 2017
Ofcom investigation into BT use of Deemed Consent
BT
today acknowledged the findings of Ofcom's investigation into the
historical use of 'Deemed Consent' by its Openreach
business.
Deemed Consent is
an agreed process between Openreach and its Communications Provider
customers. It allows Openreach to halt the installation and
reschedule the delivery date for providing dedicated business
services (known as Ethernet) in a number of specific circumstances
beyond its control.
Ofcom found that
Openreach had breached its contractual and regulatory obligations
by inadequately and retrospectively applying Deemed Consent between
January 2013 and December 2014.
Ofcom also found
that Openreach failed to compensate Communications Providers fully
after successful appeals against the application of Deemed Consent
over the period October 2013 to August 2016 - and Openreach has
already compensated Communications Providers in full for this
particular failing, which amounted to less than £1
million.
As a result of the findings, Openreach has agreed to compensate
Communications Providers outside of BT in full and Ofcom has
imposed a fine of £42 million, reflecting the seriousness of
the failings. This includes a 30 per cent maximum discount for BT
admitting its liabilities and agreeing to compensate the affected
Communications Providers in full. The precise amount of these
compensation payments will result from discussions with the
affected Communications Providers outside of BT, but is currently
estimated at approximately £300 million.
The regulatory fine and associated compensation payments will be
treated as a specific item charge. BT's trading outlook for both
2016/17 and 2017/18 is unchanged.
Ofcom has
additionally fined BT £300,000 for failure to provide accurate
and complete information under the Communications Act 2003. BT does
not agree with all elements of this particular decision, but has
decided to accept it in the interests of reaching a swift and final
resolution. BT agrees with the importance of providing accurate and
complete information in response to Ofcom's information requests,
and that this is central to the integrity of the UK's regulatory
regime.
Clive
Selley, Openreach CEO, said:
"We apologise
wholeheartedly for the mistakes Openreach made in the past when
processing orders for a number of high-speed business
connections.
"This shouldn't
have happened and we fully accept Ofcom's findings.
"Since I became CEO
of Openreach in February 2016, we have monitored this area very
closely, we have made improvements to how we process and deliver
such connections, and we will make sure the same mistakes aren't
repeated in future.
"This issue is
unrepresentative of the vast majority of work conducted by
Openreach and we are committed to delivering outstanding service
for our customers."
Gavin Patterson, BT Group Chief Executive
said:
"The investigation
into historical Deemed Consent practices at Openreach revealed we
fell short of the high standards we expect in serving our
Communications Provider customers.
"We take this issue very seriously and we have put in place
measures, controls and people to prevent it happening
again.
"My management team
and I are determined that BT applies the highest standards when
serving our customers."
Openreach response
Openreach
has invested in significant changes to training, systems and
practices for handling Ethernet orders and the Deemed Consent
process.
This
has included developing a Revised Job Control Manual - with input
from the independent Office of the Telecommunications Adjudicator
(OTA) - that has given Openreach's Job Control teams greater
clarity and transparency on the Deemed Consent process; better
training and coaching; and continuous feedback. Openreach has
shared this new approach with its Communications Provider customers
and it has delivered record numbers of such connections during the
last year.
Openreach has also
made improvements to the way it processes payments awarded on
successful appeals against Deemed Consent
applications.
Openreach will be
contacting all the affected Communications Providers in the coming
weeks and offering them a full and fair settlement. This will be
based on an approach that has been discussed with Ofcom and this
will cover the period from January 2013 to September 2016 (i.e.
beyond the period of Ofcom's investigation and to the point at
which Openreach introduced major reforms to the Deemed Consent
process).
Openreach and Ofcom
are discussing further improvements to the Deemed Consent process
which would benefit all parties.
Openreach has changed fundamentally and has implemented a number of
major governance enhancements in recent months to make it a more
transparent and autonomous business. This includes appointing an
independent Chairman and establishing a Board with a majority of
independent members in January 2017.
ENDS
The
person responsible for making this announcement is Dan Fitz, BT's
Company Secretary.
Notes to Editors
Over
the period 2013/14 to 2016/17, the total Ethernet Service Level
Guarantee payments paid by BT to Communications Providers amounted
to £87 million.
About BT
BT's
purpose is to use the power of communications to make a better
world. It is one of the world's leading providers of communications
services and solutions, serving customers in 180 countries. Its
principal activities include the provision of networked IT services
globally; local, national and international telecommunications
services to its customers for use at home, at work and on the move;
broadband, TV and internet products and services; and converged
fixed-mobile products and services. BT consists of six
customer-facing lines of business: Consumer, EE, Business and
Public Sector, Global Services, Wholesale and Ventures, and
Openreach.
For the
year ended 31 March 2016
1
, BT Group's reported
revenue was £19,012m with reported profit before taxation of
£2,907m.
British
Telecommunications plc (BT) is a wholly-owned subsidiary of BT
Group plc and encompasses virtually all businesses and assets of
the BT Group. BT Group plc is listed on stock exchanges in London
and New York.
1
The results for the
period have been revised to reflect the outcome of the
investigation into our Italian business. Detail of which is set out
in our third quarter results announcement published on 27 January
2017. This financial information is unaudited.
For
more information, visit
www.btplc.com
Signatures
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
BT Group plc
(Registrant)
By:
/s/ Dan Fitz, Company Secretary
--------------------
Dan
Fitz, Company Secretary.
Date
27 March
2017
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