BT suggests extension of ‘broadband tax’ to mobile operators

10 Jul 2009

British broadsheet The Guardian is reporting that fixed line and broadband incumbent BT has called for the recently announced ‘broadband tax’ to be extended to mobile phone users. The GBP0.50 (USD0.81) per month levy was proposed in the final Digital Britain review released last month as a means to generate funds to allow the rollout of super fast broadband networks to 90% of the country by 2017. BT claims that by extending the levy to mobile operators, which will be allowed to bid for a portion of the estimated GBP150 million and GBP175 million per year raised by the ‘tax’, the government could minimise the cost to consumers. Emma Gilthorpe, BT’s director of industry policy and regulation, said: ‘The government should consider the opportunity to widen the base for the tax and possibly reduce the amount that each individual household pays.’

The funds raised by the extra charge will be paid in to a Next Generation Fund (NGF), managed by regulator Ofcom, and is expected to help roll out super fast broadband services to 20%-30% of the country in areas not seen as commercially viable by the operators; the government estimates around 60%-70% of the country will gain access to such services under plans by BT and Virgin Media to build nationwide fibre networks. There are, however, concerns from industry players that the proposed levy may still not be approved, as it requires the introduction of a new finance bill, which now appears unlikely before March 2010. By that date the government is likely to be focused on the forthcoming general election and the introduction of any new ‘taxes’ are unlikely to be seen as a vote-winning move.

United Kingdom, BT Group (incl. Openreach)