UK's communications watchdog Ofcom announced that it is planning to turn Openreach into a separate company. It seems as the pressure Ofcom has been under, by BT's competitors has finally paid off.
However, at least for the time being, Openreach will stay within the BT Group. It will still be turned into a separate company, with its own Board. It will move its staff to the newly created company, and will increase the consultations with the customers using the network (those would be the same ones that lobbied at Ofcom for the separation of Openreach – Sky, TalkTalk and others).
The physical network will be given to the new Openreach entity, and will have a separate branding.
Commenting on the news, Cable.co.uk telecoms expert Dan Howdle said this means Openreach will be completely torn from BT's hands: “This move is clearly the first in a multi-stage process toward severing Openreach from the BT Group completely. If permanent separation were to happen, existing staff would need to be reassigned, a new board appointed, budgets allotted, and it would need to become discreet owner of its existing infrastructural assets – all of which is exactly what is happening today. Full separation is now inevitable."
Ofcom said this model would mean Openreach will have the 'greatest degree of independence' from BT Group, without incurring the cost and disruption to both industry and consumers.
The goal is to have Openreach act more independently, and make decisions on its own. "If it cannot achieve this, Ofcom will reconsider whether BT and Openreach should be split into two entirely separate companies, under different ownership,” Ofcom said.
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