Telecoms regulator Ofcom has given the green light to BT’s proposals to further open up the telecoms market to its competitors.
Undertakings proposed by BT in June have been accepted by Ofcom after a consultation, and remove the immediate threat of BT being split up into separate businesses to enforce fairer competition in the broadband, leased line and other telecoms markets.
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Ofcom said that more than 200 undertakings by BT would lead to lower prices and greater choice of products and services for consumers and businesses, and would also improve the UK’s industrial and economic competitiveness in the future.
As part of its settlement with Ofcom, BT has launched a new access services business Openreach, to be controlled separately from the main BT group.
This new multi-billion-pound business, also proposed in June, will deal with the needs of rival service providers who want to launch competitive services to BT but use part of BT's infrastructure to do so.
Openreach is expected to give a big kick-start to local loop unbundling, whereby competitors get fairer and easier access to BT’s exchanges to provide “last mile” broadband connections to businesses and homes.
Ofcom chief executive Stephen Carter said, “The management of Openreach and a new Equality of Access Board must now deliver - and be seen to deliver.”
BT chief executive Ben Verwaayen said, “This settlement is a defining moment for the industry and BT is totally committed to it. It offers a fresh start and means that service providers will be able to focus entirely on their customers without being distracted by micro-regulation.
“It provides everyone with greater certainty and clarity. That, in turn, will release investment and innovation from which everyone will benefit.”
Openreach is set to become a familiar household name as it will contain BT’s field force of 25,000 engineers. These engineers make more than 3.5 million home visits every year on behalf of hundreds of service providers.
As well as having a new name, the business will have a new look. Its 22,000 vans are to be resprayed to distinguish them from the rest of the BT fleet.
The vans will be recognisable by bright, multi-coloured waves along the length of each vehicle.
Openreach will be operational from next January. The business will be headed by chief executive Steve Robertson. While remaining a part of BT, it will have its own headquarters and be supervised by the new Equality of Access Board, which contains a majority of non-BT executives.
It will employ around 30,000 staff, previously employed by the BT Wholesale and BT Retail divisions.
Openreach will be the second-largest business in the BT group and will have sales of more than £4bn.