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BT/ Openreach Status Quo Unlikely to Continue!

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Ofcom has said the status quo between BT and Openreach is unlikely continue. The regulator is currently reviewing the company’s provision of superfast broadband and whether the the network arm of BT should be structurally separated and run independently. Critics of BT say it has not invested enough in Openreach and want it sold.

Ofcom’s chief executive, Sharon White explained that structural separation was one of four options being explored. These included:

  • To leave things as they are which White says is “unlikely.”
  • Further deregulation.
  • Structural separation of Openreach and BT
  • Adjusting the existing system to make it “more fit for purpose”

Ms White said the UK was doing fairly well in rolling out superfast broadband compared with other major European economies which suggests a split is not a foregone conclusion. But she said it was unacceptable that 2.5 million homes did not have access to minimal broadband speeds of 10 megabits per second.

Ofcom completed the first phase of its digital communications review in the summer and is expected to report its recommendations next year.

BT has always maintained splitting off the Openreach division would be a “mistake”, saying only a company the size of BT can ensure future delivery and investment.

A spokesperson for BT said in a statement: “The UK’s broadband market compares well with other major European countries, but it has also changed beyond recognition in the past decade and regulation needs to be updated to reflect that.”

“We believe the current model works extremely well but there is always room for improvement and for deregulation given the UK market is now far more competitive than it was a decade ago.”

A Vodafone spokesperson said: “Regulators must decide. Either break up BT and get the true competitive fibre Britain needs to compete with the world…..or let BT recreate its monopolist past and watch Britain’s economy fade away.”