Did you hear that? That was the sound of BT cables snapping – once wrapped tightly around its subsidiary, Openreach. Thanks to mounting pressure, BT has agreed to separate from Openreach to make way for a completely independent infrastructure platform and much-needed competition. But, are BT and Openreach really independent? And what does this mean for the market?
It has been a long time coming, but finally, the fight over the UK’s infrastructure landscape is over. Common consensus seems to be that the full sell-off of Openreach from BT would have been the ideal solution, but the legal separation of the two is widely accepted as fair and good for the market – even by fierce competitors like Sky and TalkTalk.
Here’s why this is important: The BT group owns the pipes and telephone cables that connect just about every house and business in the UK to the national broadband and phone network. Their (now former) former subsidiary, Openreach, managed BT’s local access networking connecting customers to the local phone exchange, managed the connections between the Main Distribution Frame, as well as the BT wholesale and jumper connections.
Openreach was supposed to work independently, though, giving infrastructure access to all service providers. But, the BBC reports rivals like Sky, TalkTalk, and Vodafone – who use the Openreach network to offer broadband to their customers – have been complaining of “high charges, poor service and failure to invest in the division”.
Now, after two years of negotiations with the communications industry independent regulator, Ofcom, Openreach will now be run as a totally new company with an independent board, its own staff, and strategy. Technically, though, BT still owns Openreach – the shareholders just have less of a say.
But, are customers really going to see a difference? We’re hopeful. In the end, the move was a great alternative to what could’ve been years of legal battles if the two tried to entirely separate. That kind of delay could have held up much-needed infrastructure upgrades and totally affect the quality of the market as a whole.
The legal separation also means there’s the possibility of getting dark fibre access from an independent platform anywhere in the UK. Smart service providers are going to hop on this quickly to offer customers vastly diversified solutions – as they won’t be tied down to Openreach’s “Ethernet Access Direct” or “Ethernet Backhaul Direct” products.
In the end, we think this is a great move that opens up the market to fair competition. Do you want to know how the opening of the UK telecom infrastructure affects your business? Shoot us an email at email@example.com to set up a complimentary consultation – we’ll get you up to speed on the quickly changing landscape. Plus, if you set up a complimentary meeting with us, you’re automatically entered for a chance to win 2 tickets to the Formula 1 event at Silverstone on July 16! After all, we love speed… especially with your network!