BT says privacy concerns not an issue with Phorm

Commenting on the system, which tracks web users activity to match them to more relevant advertising, a BT spokesman said: “We don’t think it raises any privacy concerns.”

The spokesman said BT would continue to “monitor” how the Webwise technology fares with other ISPs before making a decision, but stressed there was no timeline in place for this decision.

Rival Virgin Media is also continuing to assess the system. It said it recognises “some consumers have significant concerns about the potential implications of interest-based advertising for their privacy”.

Talk Talk is the only one of the three UK ISPs to have terminated its agreement with Phorm. The firm, which is owned by Carphone Warehouse, said: “We’ve never undertaken a customer trial and, following a thorough assessment of the Phorm system, we’ve decided to focus on other opportunities.”

BT’s announcement on Monday that it had no immediate plans to deploy Webwise sent Phorm’s share price tumbling from its 3 July closing price of £4.75 to £3.50. Talk Talk’s announcement yesterday pushed the value down further to £2.33, and shares were down a further 13% today.

In a bid to calm the market, Phorm issued a statement reiterating that its business was not reliant on the UK market and that it was making “excellent progress” overseas, particularly in South Korea where the technology is being trialled by KT, the country’s leading ISP.