BT Group has agreed to legally split off its Openreach network division into a separate entity as demanded by Britain’s telecommunications regulator, a victory of sorts for the phone carrier’s rivals though not as complete a breakup as they had sought.
Openreach will have its own staff, management, strategy and a “legal purpose to serve all of its customers equally”, the regulator, Ofcom, said in a statement Friday. The agreement follows Ofcom’s proposal of such a change in November.
“BT has agreed to all of the changes needed to address Ofcom’s competition concerns,” the regulator said. “As a result, Ofcom will no longer need to impose these changes through regulation.” The changes are set to begin this year.
Under the agreement, BT will retain ownership of Openreach but the unit will be run at arm’s length, with a separate board.
The move aims to improve access to the network for rivals like Sky, TalkTalk Telecom Group and Vodafone Group, which rely on Openreach to offer broadband to consumers.
They had been seeking “structural separation” of the network unit, saying it should be turned into an independent company with no ownership links to BT. — (c) 2017 Bloomberg LP