Why Ofcom’s Openreach split could be good news for rural broadband in Yorkshire

BT's Openreach broadband operation should become a "distinct company" within the BT Group as part of reform proposals put forward by telecoms regulator Ofcom.
Picture: Gareth Fuller/PA Wire
BT's Openreach broadband operation should become a "distinct company" within the BT Group as part of reform proposals put forward by telecoms regulator Ofcom. Picture: Gareth Fuller/PA Wire
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A MOVE to separate BT from its Openreach infrastructure division could open the door for other companies to provide faster broadband to Yorkshire’s rural communities, it was suggested last night.

The telecoms regulator Ofcom said yesterday that Openreach should become a “distinct company” within the BT Group, as part of a major reforms package.

Although it fell short of demands from rivals for a complete sell-off of the infrastructure business, the shake-up further loosens BT’s grip on the overhead and underground wires that connect most of the UK’s homes and businesses to the broadband and telephone network used by providers such as Sky, TalkTalk and BT’s own consumer division.

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The “pole-and-duct” network of tunnels and telegraph poles will now be opened up to other companies, who can install their own fibre cables in the same spaces, if they see a business opportunity.

Telecoms analyst Matthew Howett at the research firm Ovum, said rural areas could be among those to benefit from the increased competition.

He said: “They’re making available access to BT’s pole and duct network. That’s quite clever because it opens the market for some enterprising company to put in their own cables.”

Mr Howett also said the decision not to make BT sell Openreach should guarantee that its existing investment in rural areas would continue.

“I think rural areas can breathe a sigh of relief,” he said.

Ofcom’s proposals came a week after MPs said that if BT did not ramp up investment in Openreach and address poor service, it should be forced to split off the division.

Ofcom chief executive Sharon White said: “We’re pressing ahead with the biggest shake-up of telecoms in a decade, to make sure the market is delivering the best possible services for people and business across the UK.”

The current structure of BT was introduced by Ofcom in 2005. But the regulator said that although it had increased competition, it meant BT retained influence over significant Openreach decisions and had an incentive to make decisions in the interests of its own retail businesses.

TalkTalk chief executive Dido Harding said the move was “a step in the right direction” but warned that it could favour BT by allowing it to continue “gaming the system” of complex regulations, a claim denied by BT chief executive Gavin Patterson, who said the company was introducing “significant changes” to meet the concerns of Ofcom and the industry.

He added: “These changes will make Openreach more independent and transparent than it is today, something both Ofcom and industry have requested.”