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BT Willing to Give Broadband Division More Independence

April 25, 2016


Openreach could have autonomous board with greater say on investment, ahead of Ofcom decision over whether company’s network hinders rivals

BT is willing to give more autonomy to its Openreach broadband network division, creating an independent board with a greater say over investment, its chairman has said.

Rival telecom providers who rely on BT’s network have accused the group of not investing enough and providing a poor quality of service and regulator Ofcom has threatened to break up Britain’s biggest telecoms provider if it does not improve broadband access in the country.

Ofcom is due to give its findings about how Openreach should be run on Tuesday and its chairman spoke publicly on Monday to set out its future plans.

“We need to improve the transparency, we’re absolutely willing to form an Openreach board that would have an independent chairman, a majority of independent directors,” he told BBC Radio.

“We’re willing to give more authority to Openreach in determination of its capital investment programme.”

BT’s share price was up more than 2% in early trading on Monday, one of the biggest risers in the FTSE 100.

Last week MPs on the culture, media and sport select committee criticised BT in a report, claiming it had underinvested in Openreach to the tune of several hundred million pounds.

In February, Ofcom stopped short of recommending that BT be forced to spin off Openreach, as requested by competitors including TalkTalk and Sky. Instead, the regulator told BT to open up its infrastructure and threatened the company with big fines if the service did not improve.

The culture committee said Ofcom had not pushed BT enough in the past to improve Openreach’s service. BT has deliberately spent money on high-risk activities with potential high returns, including Premier League and Champions League TV rights, while keeping investment in Openreach flat and maintaining poor service levels, the MPs said.

BT said it was in talks with Ofcom about giving Openreach more autonomy and it hoped to reach a deal that would satisfy the committee. It said the service needed to improve and that it was spending money to make this happen.

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