BT reassured by Ofcom that it will get a return from Next Gen Broadband

With a significant drop in last quarter profits BT have now been promised by telecommunications regulator that the telco will be allow to make a profit from the upcoming next generation broadband network.

Ed Richards, the chief executive of Ofcom has assured BT that the regulatory body will not stand in the way of the telco making a significant profit and that its forthcoming fibre optic network will make an adequate return.

Ed Richards recently told a national newspaper that the new regulatory regime that has been planned by Ofcom would not be an “obstacle” for the BT network.

BT had stated before that unless it was able to make a sufficient return its plans for the installation of a superfast fixed-line broadband network would not go ahead in July, so this would be good new for the telecoms giant.

The all clear was given to BT by Richard saying “Regulation will not be a barrier to this kind of investment. I am confident we will lay out a regulatory framework which will clearly enable companies to be free to make a return which justifies the investment they are making.”

BT has now received confirmation that Ofcom will allow the telco more freedom on the price it will be allowed to charge rival ISPs for its wholesale business.

With new of pre-tax profits for the third quarter dropping by 74 percent BT is currently going through a tough time. This could mean a serious set-back for the £1.5 billion proposed for the next-gen broadband project due to the slump and an air of caution is being circulated.

A great deal of negative feeling had been expressed by the BT shareholders with regards to BT’s plans to install super-fast broadband throughout the UK back in November. The suggestion was made by the shareholder collective that the funds set aside for the project should instead be saved to Ian Livingston to chief executive of BT.