BT will not have to sell-off Openreach, but has been ordered to make its broadband division more independent to improve the UK’s internet network.
Following a year-long review, media regulator Ofcom has set out a “major reform” of Openreach, which runs the wires and cables for the UK’s telecoms network and its customers include Sky, Talk Talk, and BT.
Ofcom has resisted calls to force BT to sell off Openreach, which was a central recommendation in a report endorsed by 121 MPs earlier this year, but wants the division to become a legally separate company within BT.
It said Openreach should have its own board, workforce, budgetary controls, and independent branding in order to provide it with independence from the wider BT group.
Ofcom chief executive Sharon White said the change will help get faster, more reliable broadband to more people.
“It will mean that we have faster, more reliable broadband. It will mean that engineers turn up on time, get the job done first time. And I think also, crucially for the UK, it will mean more investment in fast fibre to the doorstep,” she told the BBC Radio 4 Today programme.
“These changes will make Openreach more independent and transparent than it is today, something both Ofcom and industry have requested,” he added.
“Openreach is committed to delivering better service, broader coverage and faster speeds and these changes will enable it to do just that.”
But Openreach customers responded to the news with caution.
“Today’s proposal to create a legally separate Openreach is a step in the right direction, although falls short of the full change that would have guaranteed the world-class broadband network customers expect and the UK will need,” said Sky chief executive Jeremy Darroch.
“In particular, leaving Openreach’s budget in the hands of BT Group raises significant questions as to whether this will really lead to the fibre investment Britain requires.”
Talk Talk chief executive Dido Harding added that the separation will not stop BT from “gaming the system”, adding that it plans to continue to lobby Ofcom as part of its consultation on the changes, which runs until 4 October.
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