Ofcom Expresses Worries Over Independence Strategy of Openreach From BT

    Photo by Andy Roberts from Flickr

    Ofcom, the telecoms regulator of the United Kingdom, has expressed its concerns regarding the level of control that BT, the broadband and mobile provider, continues to hold on the strategy of Openreach, affecting the true independence of the company after legally separating from BT one year ago.

    The positive progress that Openreach had made on becoming independent was acknowledged by Ofcom in an annual report that was published yesterday. It included the establishment of a new board and the removal of the branding of BT.

    However, the regulator noted that Openreach and BT may have yet been able to achieve “the appropriate balance,” as evidence revealed that BT is still “significantly involved” in the financial planning process of the offshoot.

    The final legal separation has yet to take place, because of the unforeseen issues that are surrounding the pension scheme of BT. The said issues have now been resolved.

    However, in a report that was released on Thursday, Ofcom said that the progress towards the legal separation of Openreach and BT has been “broadly satisfactory,” however, it said that a few steps were yet to be completed including the transfer of the employees of Openreach to the new Openreach Ltd because of the complexities of the pension scheme of BT.

    Openreach disclosed that it agrees that there is still more to do, however, it said that it is pleased with the findings of Ofcom so far.

    A specialist team was established last year that is aimed to specifically monitor the situation, which Ofcom noted it will continue to do for the next 12 months.

    In its report, Ofcom stated: “We are also concerned that BT’s newly established Investment Board reviewed Openreach’s investment proposals to be included in its strategic plans before the final draft plans were presented to the Openreach Board for approval.