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BT’s Openreach hails Ofcom report on strategic independence of broadband business

The communications regulator said Openreach has made “good progress in strengthening and safeguarding” its strategic independence from the wider business

BT Group PLC - BT’s Openreach hails Ofcom report on strategic independence of broadband business

BT Group PLC’s (LON:BT.A) broadband arm, Openreach, has hailed a report from UK communications regulator Ofcom which said the division is making “good progress in strengthening and safeguarding” its strategic independence.

In a report published on Thursday, the regulator said BT has increased its full-fibre rollout ambitions to reach 20mln premises by the mid to late 2020s and Openreach’s fibre to the premises (FTTP) deployment is continuing at scale and pace across the UK enabled by what it said is “significant BT investment”.

READ: BT Group gets target price raise from Citigroup over consumer recovery, fibre expansion

Ofcom added that Openreach has also independently worked up its commercial business case which was scrutinised and challenged by BT Group through established governance processes before the final investment decision was made.

The regulator also said that Openreach is “improving its engagement with its wholesale customers in many areas”, developing an independent identity and building “constructive commercial relationships”.

However, Ofcom also said that some stakeholders thought the separation between BT and Openreach is not working as they think it should, highlighting concerns about BT exerting undue influence over Openreach pricing decisions. It also said Openreach “will need to do more to ensure providers can gain access at the scale and pace necessary to support the deployment of multiple, fast fibre networks for UK consumers”.

“There is no room for complacency and continued focus and vigilance will be needed to ensure progress continues, is fully embedded and sustainable”, Ofcom said.

“We’re encouraged that Ofcom recognise the progress Openreach is making as a business and, in particular, how our amazing engineers have responded to the Coronavirus pandemic. Openreach exists to promote choice and competition in the UK's broadband market, and we're continuing to focus on building a better, broader and faster network for our customers all over the country”, said Mark Shurmer, Openreach’s managing director of regulatory affairs.

“There's a big job to do, and no room for complacency, so we’ll be working closely with our customers, Ofcom, the wider industry and all of our stakeholders to keep the UK connected”, he added.

Shares in BT were 1.3% lower at 128.6p in mid-afternoon trading on Thursday.

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