Sky renews calls for Openreach to be separated from BT

Andrew Griffith

Sky has renewed calls for BT’s infrastructure division, Openreach, to be fully separated from BT in order to “fix Britain’s lagging internet”.

In a comment piece published by the Telegraph, Sky’s group chief operating officer and chief financial officer, Andrew Griffith, warned that the UK risks being “left in the slow lane” compared to other European countries.

He claimed there is a “fundamental conflict of interest” while Openreach remains vertically integrated within BT Group and called for industry regulator Ofcom to create a “truly independent Openreach, separating it out of BT Group and giving existing shareholders a share in both BT and Openreach”.

“A fully independent Openreach would be a sizeable new UK FTSE 100 company able to attract capital from investors looking for stable, utility-like infrastructure returns. And it would have a clear and single-minded purpose – to treat all of its customers equally and to raise its quality of service,” said Griffith.

However, in a statement provided to DTVE, BT criticised companies that have “talked down the UK and lobbied to split BT for self-serving commercial reasons, without making any investment commitments themselves.”

While BT acknowledged there is “more to do” it said that nine out of ten homes can order superfast broadband today and BT has pledged to spend a further six billion pounds on its fixed and mobile networks over the next three years.

The comments came as the Financial Times reported that Ofcom and BT had so far failed to reach agreement over a voluntary deal to transform Openreach into a legally separate company.

A spokeperson for BT said: “BT remains positive that a voluntary settlement can be reached with Ofcom, and we have offered significant governance changes and meaningful commitments to consumers and businesses. We hope to persuade Ofcom to embrace those changes as the most efficient and proportionate way forward.”

In July Ofcom said that Openreach should become a distinct company, but resisted calls to separate the two entities entirely.

In a set of detailed proposals, the UK regulator said that Openreach should be a legally separate company within BT Group, with its own board, executives and no direct lines of reporting from Openreach executives to BT Group.

“This model would provide Openreach with the greatest degree of independence from BT Group that is possible without incurring the costs and disruption – to industry and consumers – associated with separating the companies entirely,” said Ofcom at the time.

BT Group CEO, Gavin Patterson, said after the ruling that “these changes will make Openreach more independent and transparent than it is today, something both Ofcom and industry have requested.”