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'BT doesn't need to split up' - says BT

Friday, July 17th 2015 by Ellen Branagh

BT Openreach does not need to be split from BT, a senior figure at the company has said.

Steve Haines, group managing director of Mobility at BT Group, said if Openreach, which owns and maintains the UK’s largest broadband network, had been separated from BT in the past it would have limited investment.

Mr Haines comments came on the day Ofcom said that deciding on the future of Openreach would form a key part of its digital communications review – an overarching review of the UK’s fixed and wireless networks to make sure they work for consumers.

The regulator will look at a series of options, which also include: keeping the current model, where Openreach is ‘functionally separate’ from BT and provides equal access to its network to competing providers; imposing stricter controls on BT’s wholesale practices; and deregulation.

Speaking to Cable.co.uk at a Westminster eForum event on 'the future of mobile', Mr Haines said the company welcomed a balanced discussion on the issue.

He said: “I would advocate that BT doesn’t need to split up. I think us being together is a good thing.

“It’s allowed investment in the past, it’s allowed £3bn of investment when there was a recession on simply because Openreach was part of BT Group and had BT retail as an anchor tenant to take the risk out of that investment in a way.”

Mr Haines said they welcomed discussion as long as it wasn’t “one-eyed” but there are other issues in the industry that Ofcom should look at, including the UK’s pay TV market.

“We would advocate there’s more important things such as the pay TV market where consumers in the UK are getting a bad deal compared to the rest of Europe.

“And that’s probably a higher priority than looking at where you’ve got a load of broadband in, we’re ahead of the rest of Europe and consumers are getting best prices, we’re one of the most competitive markets in the world.”

'Rapidly changing'

Sky has welcomed the focus of BT Openreach as a topic for the review.

Mai Fyfield, Sky’s chief strategy officer, said: “For too long, consumers and businesses have been suffering because the existing structure does not deliver the innovation, competition and quality of service that they need.

“We believe Ofcom should now move quickly to ask the Competition and Markets Authority (CMA) to undertake a full competition inquiry.

“In a rapidly changing sector, it is vital for the UK that the national telecoms network delivers a service fit for the 21st century.”

Sky said its initial submission to the review included evidence showing that under-investment by Openreach had led to problems including network faults, failure to meet targets for repairing faults, long waits for new lines, missed appointments and uncompleted jobs.

It said more than 90% of new line installations, which require an Openreach engineer to attend, take 10 calendar days or longer. Almost one in 10 installations takes longer than 30 days.

Sky said Openreach misses more than 500 appointments each month to install new lines for Sky customers and fails to complete a further 4,000 jobs per month.

Other issues Ofcom will be consulting on as part of its review include the rollout of superfast broadband and the UK’s 4G coverage.

During a speech to the Westminster eForum, Mr Haines said the future of networks lay in the combination of fixed and mobile, and told the audience that if a merger with EE goes ahead, "the combination of EE and BT is a force for good".

The proposed takeover of EE by BT is currently being investigated by the Competition and Markets Authority.

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