There is plenty to worry about at BT, even without the government’s announcement yesterday that everyone in the UK should have a legal right to fast-ish broadband from 2020. The group’s enormous underfunded pension promises, its huge foray into sports broadcasting and its handling of a costly accounting scandal in Italy have all seriously unsettled investors.
The promise of a legally binding universal service obligation (USO) by the culture secretary, Karen Bradley, is an extra concern. Without details on how the cost is divvied up between BT, other providers and taxpayers, it’s very hard to gauge the impact on the company. Even its rejected voluntary proposal would have cost it £450-600 million.
The USO will probably cost it more and expose it to more robust