BT, Virgin unhappy with higher taxes on old infrastructure
In a rare show of solidarity, copper network operator BT and its cable-based rival Virgin Media spoke from the same soapbox on Monday, claiming the upcoming business rates rise would triple their tax bill and cripple plans to invest in the UK’s broadband infrastructure.
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The revaluation of business rates, announced by the Valuation Office Agency, was due to come into force on 1 April.
BT and Virgin - owned by Liberty Global - claimed the new rates would take their total tax bill to £1.3bn over the next five years, due to higher tax rates on their equipment and property assets.
In a joint press release, the pair said the hike sent a “worrying message”, and was inverse to “the government’s ambition to increase investment”.
They also quoted Ovum telecoms analyst Matthew Howett, who voiced his criticism of the looming increase.
“At a time when the government is trying to encourage private sector investment in the next generation of broadband infrastructure and reduce the digital divide, it’s a backwards step to hike business rates and not think this will directly affect the number of additional premises that could be connected.”
The government, however, was introducing a five-year 100% business rates holiday for broadband providers from April, for any new full-fibre infrastructure.
BT and Virgin would see little benefit from the offer, as they use aging copper and coaxial cable respectively to deliver so-called ‘fibre’ broadband to end users.
Other providers, such as CityFibre, Hyperoptic and TalkTalk, would likely benefit from the deal, as they were building out networks that included full fibre optic cabling to the consumer’s premises, capable of delivering speeds ten times faster than BT’s fastest copper fibre plan.
Network providers - and specifically, BT - had come under fire in recent years, for continuing to rely on old copper and cable infrastructure to deliver broadband, at a time when customers in many other countries were seeing benefits from full fibre installations.