On 29th November Ofcom announced it is proceeding with a formal legal notification to separate the Openreach division from BT Group. The former manages the majority of the UK telephony and data network, which telecoms suppliers (BT, Sky, TalkTalk, Daisy, et al) then resell on to businesses and consumers.
This comes after the Telecoms regulator had requested that BT Group split their operations into two legally-distinct companies back in July 2016. Following Ofcom’s intervention in July, Mike McTighe was announced as the first Chairman of BT’s local fixed network business. Having previously served as an Ofcom board member for eight years, it was seen as a move by BT to meet Ofcom’s concerns. However Ofcom has stated that this was insufficient.
The introduction of legal proceedings will require the telecoms giant to remove all affiliations between the two entities, with two separate boards and a chairperson with no BT connections. The move comes amid demands from other telecoms suppliers to remove the BT Group monopoly over services. Currently BT wholesale offers infrastructure to BT and competitors equally, yet still oversees control of Openreach finances.
So what impact will these changes have on businesses? Theoretically lower lead times on repairs and an increased investment in infrastructure (one of Ofcom’s aims for the split is to increase the amount of Full Fibre Broadband use across the network). The result of this would be less downtime and improved service levels. This, coupled with an ability to operate on higher network speeds ultimately translates to greater productivity for businesses.
However, it is not all plain sailing. Despite major operators pushing for a total separation of the two entities, Ofcom have made clear that ownership of Openreach will still be retained by BT, over concerns of pension disruption. Despite opposition from rivals, Ofcom has stated that a ‘legal separation’ will still achieve the desired improvements without the lengthy process of pushing for a true split.
What short term effects can we expect to see?
Ultimately few, as Ofcom must first seek EU approval to enforce the separation. This is a relatively drawn-out process that may take months, adding to the frustration of rival operators and businesses currently suffering from Openreach delays.
Effective project management through industry knowledge and sourcing the right technology partner can help to minimise Openreach’s shortcomings in service, something which ERA’s Communications Team is well accustomed in dealing with.
Article by: Pritesh Patel