BT Group — formerly British Telecom — is using its control of the UK’s main broadband network to favour its own interests and regulators should consider a breakup unless the company steps up investment and gives rivals better access, a parliamentary select committee said.
If BT fails to “offer the reforms and investment assurances necessary to satisfy our concerns, telecommunications regulator Ofcom should move to enforce full separation of Openreach”, as the broadband grid is known, the panel said in a report Tuesday.
Ofcom is expected to issue recommendations for accelerating investment in the country’s broadband grid within days.
Rivals such as wireless operator Vodafone and pay-TV provider Sky have called for the creation of a separate entity in order to give them improved access, saying the current system hampers service quality and broadband speeds.
“BT has exploited its position to make strategic decisions that favor the group’s priorities and interests,” the panel said. It said BT was under-investing in the network by as much as “hundreds of millions of pounds a year”.
BT has increased investment in Openreach by 30% from two years ago and will step up spending on the network again this year, it said in a statement.
The company said it is in discussions with Ofcom in an effort to reach a settlement to increase the autonomy of Openreach without a full separation.
“Separating Openreach from BT would lead to less investment, not more, and would fatally undermine the aims of the committee,” BT said.
But BT’s competitors lambasted the company Tuesday, with one competitor accusing the British telecoms giant of holding the nation in “shackles”.
“As Ofcom considers how to improve Britain’s broadband, it should feel emboldened to know it has cross-party political support to be radical,” TalkTalk Telecom Group said in a statement. “After years of suffering, customers deserve nothing less.”
In May, BT said it would invest £6bn (R113bn) to roll out super-fast fibre and 4G mobile connections by 2020, provided that Ofcom lets it keep control of Openreach.
In preliminary reports on its review of the UK’s network infrastructure, the regulator has stopped short of recommending a breakup.
BT shares fell by 0,8% to £3,92 at 11.48am in London, paring a loss of as much as 1,6%. — (c) 2016 Bloomberg LP
- Reported with assistance from Michael Scaturro
