Vodafone blast over BT broadband rip-off
THE boss of Vodafone launched a scathing attack on BT yesterday as he vowed to take the company on in the race to give millions of households cutting-edge internet connections.
In an explosive intervention, Vittorio Colao spoke out against the poor service and high prices he said were provided by BT’s network arm, Openreach.
And he declared that Vodafone was now ‘a cheaper alternative’ following a tie-up with Openreach rival Cityfibre.
He was speaking as Vodafone unveiled its best results in recent history, cheering the City with a bullish upgrade to earnings forecasts. Vodafone shares rose 5.1pc, or 11p, to 227p.
Openreach, which owns the lion’s share of the UK’s broadband network, has offered to install fibre cables in 10m homes – but only if it can charge customers more to pay for it.
Vodafone’s deal with Cityfibre will see them run fibre optic broadband cables into as many as 5m homes in the UK, offering much faster download speeds than those provided by Openreach to most homes.
‘We are a cheaper alternative to Openreach,’ Colao declared yesterday. ‘They will now have to decide whether they want to become more competitive.’
The Italian said a price hike from Openreach would force more of its wholesale customers – including TalkTalk and Sky – to consider switching to rivals.
In another swipe at BT Openreach, the 56-year-old said: ‘When you see most of these incumbents, they deliver late, they don’t respect quality of service commitments they have made in the contracts and, on top of this, they charge you more than what would be a reasonable price.
‘If the price is too high, you have an opportunity for someone else to come in.’
His comments are a shot across the bows for BT chief executive Gavin Patterson and Openreach boss Clive Selley, who have argued that price hikes are needed. They say it is the most realistic way to pay for the overhaul, which could cost up to £6bn. Openreach – which is whollyowned by BT – has come under pressure to roll out so-called ‘fullfibre’ connections, where modern fibre cables would run all the way into households and offices.
At the moment fibre cables only go as far as street cabinets, with Victorian-era copper wires used for the last stretch into homes.
Openreach has said it will spell out its own plans – including how an upgrade could be paid for – by the end of the year.
Sharon White, boss of communications watchdog Ofcom, has also pushed to open up Openreach’s infrastructure such as poles and ducts to these firms.
An Openreach spokesman said: ‘We welcome competition and our ambition is to cover many more than a million homes, so we’ve been honest that it will involve modest wholesale price increases.’
Colao’s comments came as Vodafone said it now expected earnings of £13.4bn this year – up from an estimate of £13bn. Revenue fell 4.1pc to £23.1bn in the six months to September 30, compared to the same period last year.