BT agrees to legal separation from Openreach

posted on 10 March 2017, updated on 10 March 2017

BT has agreed to Ofcom's plans for legal separation of BT from its Openreach division, with Openreach to become a distinct company within the BT group. In November 2016 Ofcom ordered this separation in order to provide competitors with better access to the telecoms infrastructure, which Openreach runs, and better service for customers. 

Openreach will now become a distinct company with its own staff, management, purpose and strategy.

This agreement means that the changes won't be imposed via regulation. Instead BT has vountary agreed to the following:

  • Openreach will become a distinct company, legally required to make decisions in the interests of all Openreach’s customers.
  • The Openreach board will run the company.
  • Openreach will develop its own strategy and annual operating plans, within an overall budget set by BT Group.
  • Executives will be accountable to the new board.
  • Staff will work for Openreach.
  • Assets will be controlled by Openreach alone. 
  • Openreach will consult formally and confidentiality with customers such as Sky, TalkTalk and Vodafone on large-scale investments.
  • BT will be removed from Openreach branding, to reflect the company’s greater independence.

The new model will be supported by careful, continual monitoring to ensure it is effective. As part of this, BT will provide Ofcom with additional transparency on the nature of interactions between the new Openreach and the rest of BT Group.

For more on broadband infrastructure, see the Recent Developments in Broadband section and ICT Infrastructure part of the stream.

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