LONDON — BT shares are at the top of the FTSE 100 shortly after the open on Friday, buoyed by a deal with the regulator to spin-off its broadband and telephone infrastructure business Openreach.
BT has been under pressure from competitors and the regulator to separate from Openreach, which runs the cable network that connects nearly all of the UK to broadband internet and landline phones. The regulator Ofcom has been investigating the issue for two years.
On Friday the telecoms provider announced that it has reached a deal with Ofcom to turn Openreach into a legally separate entity with 32,000 staff, but said the company would remain within the wider BT group.
BT CEO Gavin Patterson says in a statement that the deal “end[s] a period of uncertainty for our people and support further investment in the UK’s digital infrastructure.
“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.”
The removal of the cloud over BT has sent shares rocketing almost 5% in London after 15 minutes of trade:
The decision has had a muted impacted on BT’s competitors, perhaps because Ofcom will remain part of the wider group. Vodafone shares are up 0.07%, while Sky shares are down 0.10%.
The broader FTSE 100 has opened higher on Friday, up 0.40% at 8.17 a.m. GMT (3.17 a.m. ET):
Aside from BT, another notable riser is commodities giant Glencore, up 1.48% thanks to a rebound in the share price from a difficult Thursday.
At the other end of the table, Mexican precious metal miner Fresnillio is down just over 3%, hit by sliding gold and silver prices. At 8.20 a.m. GMT (3.20 a.m. ET), gold is down 0.67% to $US1,195.15 and silver is down 0.93% to $US16.87.