Watchdog: BT split to speed up service

Ofcom says spin-off should improve broadband

MILLIONS of households can expect better broadband after the semi break-up of BT, the telecoms regulator has claimed.

Ofcom yesterday announced BT had agreed to make its Openreach division a legally separate business.

Openreach has a virtual monopoly on installing and maintaining the country’s phone lines and internet cables. But it has been blasted for high charges, poor service and dragging its feet on investment.

Ofcom’s solution is to make Openreach an arm’s length company with its own board and day-to-day control over £11billion worth of assets.

Openreach’s 32,000-strong workforce will also transfer to the new company, but BT will still be responsible for their pensions.

The set-up, if all goes to plan, will mean Openreach consulting much more with big clients such as Sky and TalkTalk, which piggyback its network for their own customers.

Ofcom also reckons they will be more likely to plough money into improving broadband coverage and speeds.

BT will retain ultimate control over Openreach, which generated 11% of the group’s revenues last year but 40% of its profit.

The new Openreach board will also be answerable to BT boss Gavin Patterson. He said: “I believe this agreement will serve the longterm interests of millions of UK households and businesses.”

Sharon White, head of Ofcom, warned a full-blown break-up of BT was still possible. She said: “If it is not delivering for its customers, our ultimate backstop is to look at structural separation.”

TalkTalk boss Dido Harding said: “The new company will be better placed to deliver improved service,” but Tom Mockridge, of Virgin Media, said: “Openreach is the same old snail’s paced network with a new shell.”