Openreach, BT’s network subsidiary, is in a stand-off with regulators and their own mobile arm regarding the introduction of new “dark fibre” services that are designed to boost competition and bring prices down.
Ofcom wants Openreach, which is legally independent of BT having its own board, to allow customers of the telecoms company to connect their own equipment to its fibre optic network.
Dark fibre services would cost Openreach approximately £120m per year in lost business. Mobile operators, in particular, would be able to connect their own masts together, reducing costs.
However, the plans of Ofcom are in doubt after Openreach successfully challenged new regulations that are designed to impose dark fibre in the High Court.
Last week, Openreach started an alternative service that it hoped would meet the demand for dark fibre. However, the move was attacked by telecoms companies for being insufficient.
Ofcom is waiting for the details of the High Court judgment before revising regulations. It also dismissed the alternative of Openreach.
A spokesperson stated: “We continue to believe that dark fibre can bring significant benefits for businesses and consumers.” It is understood that the resistance of Openreach to dark fibre has caused pressure within BT. EE, the mobile arm of the company, could make savings and the new independence of the network subsidiary has created room for conflict.
This week, BT will deliver its half-year report and try to steady itself after a series of financial blows.
Despite City concerns regarding a new profit warning, sources said that there was a chance of a positive surprise, such as a reduced bill for its Italian accounting scandal.