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December 2, 1993

UK OFFICE OF TELECOMMUNICATIONS ORDERS BRITISH TELECOM REBATE TO MERCURY

By CBR Staff Writer

The UK Office of Telecommunications yesterday decreed that Mercury Communications Ltd has paid British Telecommunications Plc too much in interconnection charges, and ordered British Telecom to make refunds dating back to June 1992. Mercury says it expects a net benefit resulting from the ruling of UKP50m, including UKP20m for the period from June 9 1992 to the end of its last fiscal in March. The Office also ruled that telephone companies that use British Telecom’s network must pay the company an access deficit charge to contribute to the cost of the dominant operator fulfilling its commitment to provide uneconomic phone service in remote rural areas, and separated domestic and international access charges. Although Mercury reckons it will gain a net UKP50m, British Telecom says it expects the move to cost it some UKP90m backdated to June last year. It said it had already made adequate provision for this sum as it had had a rough idea of the impact of the Oftel move. It will have no immediate impact on the profit and loss account, BT said, adding that some elements of the determination did not take into account risks and costs to BT and gave Mercury more protection than it needed.

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