BT accused of overestimating rural broadband cost

UK legislators have accused BT of overestimating the cost of providing broadband in rural areas.

British MPs have accused the telecom company following findings from a National Audit Office (NAO) report which revealed that the rollout of broadband to rural areas will cost £92m less than BT estimates.

According to the UK Public Accounts Committee, Broadband Delivery UK (BDUK) is spending £790m on its superfast (rural) broadband programme.

The programme is aimed at providing superfast broadband provision to remote parts of UK.

Reports published on the rural broadband programme in September 2013 and April 2014 raised concerns over BT’s lack of transparency over its plans for superfast broadband coverage.

The BBC quoted PAC chairwoman Margaret Hodge as saying: "It is very concerning that it looks like BT could have abused its dominant position in the market by vastly overestimating forecast costs in the first place when it put in its original bid, and we also have broader concerns about whether the deal represents value for money."

Responding to the accusations, BT said that the initial cost estimates were "based on our initial view of how much it would cost to deploy fibre in rural areas".

"The suggestion we inflated those costs is bizarre as by doing so we would have hindered our chances of winning the work."

NAO added: "As at September 2014, BT’s total reported capital spend on phase 1 of the programme was £142 million (38%) under the estimated price, including work in progress not yet invoiced."

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