Openreach is to be a legally separate company within BT following an agreement between the telco and regulator Ofcom.
Under the settlement, Openreach will have its own board with 32,000 employees transferring to the new entity. It will continue to be responsible for the build and maintenance of millions of copper and fibre lines that run from telephone exchanges to homes and businesses across the UK.
Gavin Patterson, BT Chief Executive, said he believed the agreement would be in the long-term interests of the British public. “This has been a long and challenging review where we have been balancing a number of competing interests. We have listened to criticism of our business and as a result are willing to make fundamental changes to the way Openreach will work in the future.”
Openreach Limited will have its own branding, which will not feature the BT logo.
Kester Mann, Principle Analyst, Operators, CCS Insight commented: “Today’s news provides welcome certainty after a long-running and bitter dispute over the future of the UK broadband network. Resolving it now, without having to go to Brussels to enforce a new structure, will bring much-needed stability to a UK market still reeling from the Brexit referendum.
“BT’s rivals, notably Sky and TalkTalk, will publically claim that the regulator should have gone further by enforcing a full structural separation. However, this option was always the most radical and controversial the regulator could have taken. In private they should be more than satisfied with the changes Ofcom has pushed through.”
And in response to the announcement a Sky spokesman said: “This is a welcome step that we have long called for on behalf of our customers. A more independent Openreach is a step towards delivering better service to customers and the investment that the UK needs. It’s important that today’s agreement is now implemented by BT in good faith and without delay.”
In February 2016, following the Strategic Review of Digital Communications, Ofcom began the process leading to the split stopped short of privatising the BT division.
