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BT boss: Ofcom is right to review Openreach, but shouldn't change it

Thursday, October 29th 2015 by Phil Wilkinson-Jones

It's right to review the role of Openreach within the UK telecoms market – but wrong to change it – according to the man leading BT’s superfast broadband rollout.

Bill Murphy, BT’s managing director of next generation access, said Openreach's position within the BT group has helped create “low prices and high choices” for consumers.

Speaking to Cable.co.uk at Broadband World Forum in London, Mr Murphy said Ofcom is “absolutely right” to investigate whether Openreach – which owns and maintains the UK’s largest broadband network – should be split from BT.

The investigation forms part of the regulator's digital communications review – an overarching review to make sure the UK’s fixed and wireless networks work for consumers.

Mr Murphy (pictured) said the UK has enjoyed a competitive communications marketplace since Openreach was created a decade ago.

“Why do we have low prices and such high choices? Because this is a very vibrant market,” he said.

“One of the reasons we’ve had such a dynamic marketplace is because Openreach was created and the structure of Openreach within the BT group has succeeded.

“It works with 500 different communications companies on an equivalent basis, it’s highly regulated and supervised and as a result consumers benefit.

“As a result you have such high choice in this country because people can take the components Openreach offer and build in solutions for consumers and businesses.”

Mr Murphy said the contribution made by the communications industry to the British economy is among the highest in Europe, while the UK broadband market compares favourably to others around the world.

“At the end of the day, I don’t think in Singapore, in New Zealand or Australia, I don’t think anybody has got an example that works as well as Openreach.

Dynamic marketplace

“And I don’t think you have as dynamic a marketplace anywhere in the world as we do in the UK on the back of the regulatory environment we do have. It’s right to be reviewed, it’s not right to change.”

Rivals of BT including Sky, TalkTalk and Vodafone have claimed consumers are being ‘let down’ by the UK broadband market.

An open letter signed by the three companies’ CEOs said problems with the current structure include “a conflict of interest in the role of BT, poor quality of customer service and difficulties in enforcing the existing regulatory regime”.

Virgin Media CEO Tom Mockridge, in his keynote at Broadband World Forum, said many of the submissions made to Ofcom calling for Openreach to be divested have amounted to “an attack on BT”.

“That’s not something we agree with as an infrastructure investor,” he told the conference, which took place at ExCel London last week.

Mr Mockridge said the government taking control of the Openreach network would be “frankly not a good message” to send to companies such as Virgin’s owner Liberty Global, which is investing billions in the UK.

“BT was privatised 30 years ago with that network and the choices were there to be made then. But if the government has already made the decision to privatise it, to come back at it a second time, we would say that’s not reasonable."

He said it would be better to set economic policy regulation to create a "competing network", instead of relying on "a single network which is regulated, or maybe over regulated, in order to get the outcomes you desire".

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