BT likely will retain control of Openreach after Ofcom review
UK telecom giant BT (NYSE: BT) got good news and some not-so-good news as the country's regulator, Ofcom, recommended that it maintain control of its wholesale broadband unit, Openreach. However, the regulator suggested the provider assist its competitors that want to roll out fiber along its existing copper network infrastructure.
Rival operators including Sky, TalkTalk and Vodafone wanted Ofcom to recommend that Openreach be completely split away from BT. They along with hundreds of other service providers purchase access to Openreach's last-mile network.
While Ofcom doesn't have the power to compel a carrier to make such changes, its recommendations carry a lot of weight, a Guardian article explained. For example, Ofcom could refer a carrier to the Competition and Markets Authority, which would have more authority to mandate changes.
Sky and TalkTalk were critical of the regulator's recommendations. "Independence would mean that Openreach makes the right decisions for their customers rather than the decisions that are right for BT Group," TalkTalk's Dido Harding told The Guardian.
Openreach's biggest wholesale competitor, CityFibre, was more neutral on the decision. "Ofcom's strategy to encourage fibre investment, improve competition, and to ensure meaningful and usable access to BT's physical infrastructure, creates a unique opportunity for alternative providers, such as CityFibre, to accelerate and extend new and existing roll-outs of next generation, ultrafast, fibre to the premises infrastructure projects nationwide," CEO Greg Mesch said in a statement released to the media following the regulator's recommendation.
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