(Image Credit: iStockPhoto/EuToch)
In March of last year, telecoms regulator Ofcom launched a review to determine whether BT and its network arm Openreach should be separated. Rivals had argued that BT’s control over the network led to underinvestment, producing slower speeds and reduced reliability for customers who rely on the infrastructure.
Ofcom released the results of that investigation today, deciding to allow BT to retain oversight of Openreach for the moment. The regulator imposed tighter controls designed to ensure Openreach receives sufficient investment to deliver better services. The decision has divided industry opinion, with some stakeholders warning the measures may not go far enough.
Alastair Masson, Client Partner at NTT Data UK, criticized the review as offering only incremental measures. He said: “Ofcom’s digital communications review is little more than a list of low-impact measures to stimulate high-cost competition, rather than tackling the issue of Openreach and BT’s influence on the wider market.” Masson added that the uncertainty over whether BT’s market power will be effectively constrained is delaying investment and suppressing competition.
One of Ofcom’s recommendations is to require Openreach to open access to telegraph poles and ducts. Critics note this is not an entirely new demand—sharing of ducts and poles has been in place since 2009—but Ofcom is now pressing for a detailed “digital map” that will show competitors where infrastructure improvements are needed, enabling them to plan and invest in alternative networks more confidently.
Several industry voices still favor full separation. “The simplest and most effective way to fix the current broken market structure is for Openreach to be completely independent,” a number of executives have argued.
Under Ofcom’s plan Openreach would be required to operate with greater autonomy, making its own budget, investment and strategy decisions rather than being directed by BT’s corporate finance team. Ofcom has not ruled out the possibility of full separation in the future, signaling that the regulator may revisit a split if the new governance model does not produce the intended improvements.
TalkTalk chief executive Dido Harding criticized the package of measures as insufficient. “Ofcom has produced 100 pages of consultation with little concrete action behind it,” she said, warning that the country risks another decade of debate rather than meaningful improvements for customers.
Sky similarly welcomed the ongoing discussion but reiterated its preference for separation. A Sky spokesperson said Ofcom’s measures are a temporary step and that complete independence for Openreach remains the most straightforward way to fix market imbalances.
At the same time, opponents of a full split highlight practical concerns. Separating Openreach from BT would create a much smaller standalone entity that might struggle to finance and roll out national infrastructure as quickly as a larger, well-regulated BT. The separation process itself would also involve significant time and financial costs that some argue could be better spent directly on network upgrades.
Askar Sheibani, CEO of Sorrento Networks, offered a more optimistic perspective: “With better governance, more transparency, and by giving other service providers improved access to ducts and poles, the UK telecoms market is about to get considerably more competitive, which should provide a real boost to the UK’s digital economy. BT’s commitment to invest an additional £1 billion in Openreach to expand the provision of superfast broadband is particularly encouraging.”
The debate over how best to ensure faster, more reliable broadband in the UK continues. Ofcom’s latest measures aim to increase transparency and investment without immediately forcing a breakup, while leaving separation as an option if those measures fail to improve outcomes. Industry reaction remains mixed: some welcome the emphasis on investment and access, others say only a full structural change will guarantee fair competition and better services for consumers.
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