Ref: 68/02
date: 27 November 2002

New arrangements to enhance the clarity of BT’s regulatory financial statements have been confirmed today by Oftel.

BT will provide financial information to Oftel for a wider range of categories including network components and product groups, and also give greater detail on how it compiles this information.

These changes will help Oftel to improve its regulatory decision making process on a wide range of issues such as interconnection charges and complaints.

Because of the changes BT will need to make to its accounting procedures, these measures will be phased in over several months. A number of the changes will be dealt with by agreement with BT under the terms of a side letter to the Direction which Oftel has published today.

BT's regulatory financial statements are prepared for regulatory purposes only and today’s announcement does not relate to or imply any criticism of BT Group’s statutory accounts.

David Edmonds, Director General of Telecommunications said today:

"BT appreciate the need for Oftel to have access to financial information in the appropriate form in order to decide the right level of regulatory action.

"BT has agreed to provide its regulatory accounts in a wider range of categories which will make it easier for Oftel to analyse financial information and make decisions on costs and charges.

"BT will also explain the processes it has used to prepare its financial information, so it is clear what factors it has taken into account.

"The prompt delivery of clearer information from BT will help Oftel achieve its target of resolving disputes within its new target of four months."

"Since publication of our consultation document, Oftel has held extensive discussions with BT on how it can best meet Oftel’s need for detailed cost information. I am grateful to BT’s financial team for the constructive way in which they have approached this issue."

Some of the new arrangements will apply to BT’s regulatory accounts for 2001/2002 which have been delayed while the new arrangements were finalised. BT now expects to publish these accounts by 20th December 2002.

Note to Editors

Oftel has published a Direction regarding the regulatory Financial Statements of British Telecommunications plc, explanatory memorandum and side letter to the financial Director, Ian Livingstone at BT from Chris Kenny, Oftel’s Complaince Director. This is available on Oftel’s website at http://www.oftel.gov.uk/publications/licensing/2002/state1102.htm Hard copies are available to the media from the press office on 020-7634 8991 and to the public from the Research and Information Unit on 020-7634 8761.