BT launched an immediate defence of its regulated accounts, arguing that a significant proportion of the increase in its return on capital was caused by Ofcom decisions.

The watchdog last year barred BT from attributing £230m of costs to its regulated businesses. Rivals had complained were effectively footing the bill for BT’s costs through Openreach wholesale charges.

BT said that on that basis, the increase in its returns was more modest, from 16.1pc to 17.9pc.

The rise nevertheless has stirred Ofcom to look at further price controls, particularly on superfast broadband.

According to the regulator, BT’s cost of capital for Openreach is around 9pc.

The regulator has allowed BT to make higher returns while it has been investing in super fast broadband, a multibillion-pound outlay that was viewed as risky when the company committed to it in 2009.

Commenting on BT’s latest regulated accounts, Ofcom said: “We have clamped down on the costs BT can recover, which will lead to lower prices in future.

“We are determined to create a more independent Openreach that is well placed to invest in full fibre for all of its customers. Greater separation will provide even more regulatory clarity and confidence to the industry.

“We will continue to scrutinise BT’s costs to maintain a balance between encouraging the company to become more efficient, and ensuring fair prices for competitors and their customers.”



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