BT has landed a blow against attempts to boost competition in the market for heavy-duty broadband lines for businesses, threatening access to the so-called “dark fibre” that rivals say will be crucial to 5G mobile connectivity.
The Daily Telegraph has reported that a judge-led panel ruled that the telecoms regulator Ofcom made a string of errors when it drew up the rules for a new market in dark fibre, forcing it back to the drawing board.
Key Points Raised in their report include:
- The decision sent BT shares climbing to their highest level in two months. By mid afternoon the company’s stock was up 1.4pc.
- Dark fibre would be a challenge to the dominance of BT's network subsidiary Openreach in the lucrative leased lines business.
- Leased lines are dedicated, high-capacity broadband links used by large businesses and other telecoms companies. The are worth more than £900m a year to Openreach, which is being legally separated from BT to make it more independent.
- BT's Wholesale unit, which remains fully integrated part of the company, brings in a further £200m from leased lines every year.
- Mobile operators use leased lines to connect their masts and demand is increasing as Britons consume more data on the move. The introduction of next generation 5G mobile networks in the next few years is expected to further expand the market as operators plan to build more masts.
- They hope to use dark fibre to reduce their dependence on Openreach. It has faced criticism over its pricing and a backlog of installations.
Dark fibre would allow Vodafone, Three and others to install their own equipment to send signals along fibre optics rather than paying to use Openreach kit. The new service had been scheduled to become available in October but the whole plan is now in doubt.