Openreach and BT are going their separate ways, well, sort of, after legally being ordered by Ofcom. The telecoms regulator believes that Openreach, which currently runs BT’s broadband infrastructure across the UK, should become a distinct company within the BT Group.
Although this is only the beginning of the process, Ofcom are currently preparing the formal notification to the European Commission.
One of the main reasons Ofcom is perusing this is because the regulators want Openreach to become a distinct company with its own board, with non-executives and a chairperson not affiliated with BT. It also wants Openreach to have control over its branding and budget allocation. As a result of that, Openreach would also have a duty to treat all of its customers equally, Ofcom said.
Sky and Talk Talk, BT’s main rivals, had previously complained excessively about the service they received from Openreach, the main areas of concern were predominantly in regards to charges being too high for the use of broadband lines and that they were being unresponsive to their demands. They were demanding for a full break-up of BT, with Openreach being turned into a separate company.
Although Openreach will become a legally separate entity with its own independent board, it is still unclear how control they will have, as it will still be owned by BT. We have no doubt that Sky and Talk Talk will be keeping a close eye for any signs of too much influence, however, experts believe that if BT has no say at all over Openreach, they could end up breaking away from Openreach altogether.
Either way, it will be interesting to see what the future holds for Openreach and how BT’s main competitors will react going forward.