Following the recent announcement that BT and Openreach will have to separate due to the unfair competition they place on other broadband providers, the media was quick to say that this was the beginning of a new landscape in which companies will be more closely monitored to ensure they compete fairly.
However this is all a bit of a non-story as Ofcom, the independent regulator and competition authority for the UK communications industries, has in fact stopped short of demanding a full separation of the two companies. Openreach, as a result, will still be a BT subsidiary, so will not be compelled to give the likes of Sky and Talk Talk a bigger slice of the broadband action just yet.
The move follows BT’s failure – in Ofcom’s words – to ‘offer voluntary proposals that address our competition concerns’. This announcement also shortly followed the announcement that the former Ofcom director Mike McTighe will be Openreach's first independent chairman, which some may argue is a step in the right direction for the telecoms giant. Or not.
Openreach runs the full telecoms network for the UK and owns the phone cables and pipeline that connect the majority of homes and businesses to the country’s broadband and phone network. Set up in 2006 to satisfy a number of undertakings from the Enterprise Act 2002, Openreach followed an agreement between BT and Ofcom to ensure various telecom firms had equal access to BT’s local network.
Openreach operates BT's local access network connecting customers to the local telephone exchange, which begins at the main distribution frame (MDF) in the exchange and ends at the network termination point at the end user's site. Openreach also operates connections between the MDF and the BT Wholesale/local-loop unbundling end points located in the exchange, known as jumper connections.
It is used by BT’s retail arm as well as its direct competitors who, understandably, are pushing for a full separation of the two brands. The main area of conflict here is that competitors argue that BT gains an unfair advantage for its broadband services due to its ties with Openreach.
If BT continues to fail to meet Ofcom’s demands, then the body will insist that Openreach becomes an independent company with its own board – without BT ties – and therefore not have to succumb to pressure from BT executives.
In a recent statement BT said: "We will continue to work with Ofcom to reach a voluntary settlement. We are in discussions with Ofcom on two outstanding issues, the reporting line of the Openreach CEO and the form of legal incorporation."
However, the real story will not come for at least a year, if Ofcom decides that BT is still not sharing, at which point BT will probably sell Openreach. Either way, for now, the risk is that competition will continue to be stifled by BT, which is bad news for a Britain that will soon need to compete more aggressively as it heads for Brexit.
As broadband companies fight it out, it is the consumer left paying for services that are undercut due to the intense competition between providers and unfair distribution of broadband connectivity.
Dido Harding, the chief executive of TalkTalk, spoke to the BBC and said: "consumers and businesses across the country are completely fed-up that their broadband doesn't work".
She said the Ofcom action was "a small step in the right direction" but that "even this complicated legal separation is one that BT Group has been fiercely resisting".
Sky has said that, "BT Openreach has continued to fail consumers. This is why we have always said that we want a solution that is clear and executable and in the best interests of consumers and industry."
All too often, businesses are over-reliant on such infrastructure. In today’s multi-channel environment, retailers for example are under pressure to deliver a seamless cross-channel experience. Unified communications can enable retail businesses to deliver enhanced customer experience, whilst increasing competitiveness through effective customer interaction management.
This allows enterprises and customers to interact with each other via any device, at anytime, anywhere. Typically comprising a set of proven IP telephony applications, specifically tailored for retailers and hospitality businesses, with the aim of helping to deliver a seamless cross-channel experience.
What’s more, unified communications enables productivity to increase as a direct result of staff communicating more effectively wherever they are, be it via land line, mobile or data network. More specifically - in today’s multichannel retailing environment – it makes it much easier for staff to interact with customers, whether it be via phone, social media, email or website. In essence, unified communications provide a powerful tool in the battle to retain customer loyalty by providing the edge in customer service.
Looking at the bigger picture and global broadband levels it is clear that Britain will need to up its game and sort out these squabbles so as not to be left behind the more dynamic, emerging countries – such as South Korea.
Once we have to make our own way in the world post Brexit, we will have to think like an emerging economy competing on a world stage – which ultimately means that we’ll need to take a critical look at our existing, legacy infrastructure. It simply isn’t practical to allow the entire network infrastructure to remain in the hands of a single company, particularly one that has anti-competitive interests through its retail business.
Ultimately the government as well as the regulator needs to assume more control in order to get Britain better connected.
Unfortunately though, we are living in a country with an old infrastructure and competition will easily overtake us if it comes from countries with seamless communications networks – especially if we can’t get providers to compete on a level playing field and build connectivity together.
Only time will tell what the next developments will be but 2017 will certainly be an interesting year in the world of telecommunications.
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