BT agrees to split Openreach off into legally separate company

Back in November, Ofcom ordered BT to legally separate Openreach from its core business and now, amost five months later, the telecoms provider has acquiesced to the regulator’s request. That means that they did it, but not without kicking up a bit of a stink.

The agreement, that will see 32,000 staff transfer from BT to work directly for Openreach, comes after a year-long dispute between BT and Ofcom over the terms of the separation. It means that Ofcom will now no longer have to seek enforcement from the powers that be in Brussells. 

What it all means is that Openreach will be obliged to consult with customers such as Sky, TalkTalk and Vodafone on large-scale investments. Its directors (entirely seperate from BT’s) will have to make decisions in the interest of all of Openreach’s customers. 

Ofcom chief executive Sharon White was pleased about the agreement and said: "The new Openreach will be built to serve all its customers equally, working truly independently and taking investment decisions on behalf of the whole industry – not just BT.

“We welcome BT’s decision to make these reforms, which means they can be implemented much more quickly. We will carefully monitor how the new Openreach performs, while continuing our work to improve the quality of service offered by all telecoms companies.”

Gavin Patterson, BT chief executive, said: “This has been a long and challenging review where we have been balancing a number of competing interests. We have listened to criticism of our business and as a result are willing to make fundamental changes to the way Openreach will work in the future.”

The agreement is set to come into play before the end of the year.