BT shares edge higher after TalkTalk’s broadband plea is rejected

(Getty Images)

Shares in BT jumped nearly 2 per cent in early trading after regulators rejected rival TalkTalk's complaint that its super fast broadband abuses its market dominance.

Ofcom was asked to investigate whether the difference between BT’s wholesale and retail pricing of superfast broadband was too narrow, making it impossible for rivals to fairly compete.

Different operators sell superfast broadband over BT’s network, but BT has the flexibility to set the wholesale price for offering access to its network, and TalkTalk had alleged BT, Britain’s biggest landline provider, was abusing its dominant position. But while the watchdog rejected that complaint, it said it would allow rival providers to profitably match its prices.

“Ofcom is proposing to put in place a regulatory condition requiring BT to ensure that the margin between its wholesale charges and its retail superfast broadband prices is sufficient for rival operators to compete and make a profit,” the regulator said. BT provides BT Sport free to its superfast broadband customers, but the proposed new rules will take into account the costs of these channels.

There are now 2.7 million superfast broadband customers. Shares in BT rose 7p to 392p.

Read more on the best broadband providers