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Openreach ‘doing well but needs to try harder’, says Ofcom

Openreach Salisbury.jpg

The UK regulator has given Openreach, the BT subsidiary that runs last-mile copper and fibre in the UK, a “good but try harder” assessment.

Ofcom said, in its annual report on the performance of Openreach as an independent, though BT-owned, company: “Overall, real progress has been made implementing the new arrangements, but there is more to be done.” (PDF here.)

The regulator appeared unimpressed with Openreach’s modest increase in its target for full-fibre connections, “raised from 3 million to 4 million premises by March 2021”. It noted: “BT also announced an ambition for Openreach fibre to reach 15 million premises by the mid-2020s”, adding: “But this is not a firm commitment.”

Throughout the 19-page report, Ofcom points to challenges because Openreach’s 100% shareholder is BT, leading to suspicions of leakage between staff of one and staff of the other. Openreach is expected to treat all competing telcos in the UK market, including the retail arm of BT, as equal.

“However, there is still more to do to improve transparency of how this balance is being struck, and to ensure that it is embedded and sustainable,” the regulator warns.

A big change since last year’s report is that Openreach is now expected to offer competitors access to ducts and poles – still officially owned by BT. The term “competitors” here includes companies that are building independent fibre-to-the-home (FTTH) networks.

Ofcom notes drily: “We expect to see Openreach working constructively with its competitors and we continue to closely monitor its behaviour and actions. In general, feedback from industry and Openreach’s customers has been positive, but not always.

The regulator will continue to monitor and report on Openreach and its parent company next year and in 2021. “Our annual monitoring reports in 2020 and 2021 will focus on the architecture, governance and processes of BT and Openreach and the behaviours of their people as we consider whether the changes have been embedded sustainably,” it says, adding: “This is a journey of cultural, as well as structural, change.”

Ofcom’s aim is: “Over time we expect to see this change – and Openreach independence – being institutionalised.” Will it happen? “This change will require continued and concerted effort, and it will remain a focus for our monitoring.”

 

 

 

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