Sky and TalkTalk call for BT and Openreach split
13 March 2015 |
Sky and TalkTalk have called on the regulator, Ofcom, to split BT and Openreach as part of its first digital telecoms review in a decade.
Openreach was created in 2005 as a division of BT that connects local loop - copper and now fibre - services for all competing operators equally. But rivals have complained that as a unit of BT there is an in-built bias.
TalkTalk’s CEO Dido Harding claimed a fully independent Openreach would be incentivised to maximise coverage and improve quality of service for customers. “It would end BT’s ability to erode competition, stimulating innovation, consumer choice and lower prices,” she said.
Sky’s CEO Jeremy Darroch said the structural separation of Openreach is “at the heart of creating a sustainable industry; one that provides the capacity and incentive to invest whilst also harnessing the power of multiple competing retailers to drive higher take up and lower prices for customers."
BT’s rivals have increased their calls for the break-up since the company announced its planned acquisition of EE in December last year, arguing that its ownership of Openreach would stifle competition in the country.
In response, BT said there was no case for the structural separation, with the UK leading the EU's five biggest economies for superfast broadband. "The current Openreach model has served the UK very well resulting in high levels of investment, intense retail competition, very high levels of coverage and take up and low prices," it said.
Ofcom said the latest review would examine a range of issues, including ensuring the right incentives for private-sector investment, maintaining strong competition and identifying the scope for deregulation in some areas.