BT Fury At Ministers' 'Radical' Ofcom Call

The chief executive of BT Group (LSE: BT-A.L - news) has accused ministers of failing to acknowledge its efforts to overhaul Britain's broadband infrastructure as regulators mull tougher oversight of the former state monopoly.

Sky News has learnt that Gavin Patterson wrote to John Whittingdale, the Culture Secretary, last week in the wake of the Government's response to Ofcom's digital communications review.

Published on Wednesday, the Government said it "believes Ofcom should be firmly focused on taking whatever action is needed to correct the competition problems identified, and to promote the growth of the digital economy, however radical a change that might be".

It (Other OTC: ITGL - news) added that Ofcom should "confirm a clear and speedy timetable for decision-taking on the necessary changes to resolve the issues identified".

Mr Patterson is said to have been irritated by the Government's response, prompting him to write to Mr Whittingdale to argue that ministers had not taken account of a promised investment in improvements to its broadband network, which is also used by BT's competitors.

His letter added that the Government had not recognised in its response BT's planned introduction later this year of G.Fast (Shanghai: 600391.SS - news) , an upgrade to its existing copper network.

BT has said it will invest at least £1bn in delivering ultrafast broadband if it gains regulatory certainty over its ownership of Openreach, its infrastructure arm which rivals have demanded should be spun off.

Sky plc (LSE: BSY.L - news) , the owner of Sky News, TalkTalk and Vodafone have argued that Openreach's continued ownership by BT represents a conflict of interest because it reduces its incentive to invest in upgrading its infrastructure.

Vodafone has accused BT of engaging in a game of "intellectual hide-and-seek", saying in a regulatory submission that it loads Openreach with "inappropriate costs from other parts of its business, which it expects to be paid for by the rest of the industry and passed on to customers".

BT has denied those suggestions.

The Government's response to Ofcom's review said it agreed that "the current relationship between BT and Openreach will not deliver the country’s needs for more competition, better innovation and better service".

Mr Patterson's letter to the Culture Secretary comes at an important time for BT, which is implementing a new organisational structure in the wake of its £11bn takeover of EE, the mobile phone group.

It has also appointed a new finance director, Simon Lowth, to replace veteran finance chief Tony Chanmugam.

BT, which competes for telecoms, broadband and pay-television customers with Sky, has a market value of nearly £44bn.

The company declined to comment on Monday.