BT bends in battle to give Openreach its independence

BT promises to give Openreach more autonomy as it bids to avoid break-up

Telecoms giant BT has offered to give more autonomy to its ring-fenced infrastructure division, Openreach, as it battles mounting political and regulatory pressure to break it up.

Ofcom will publish its long-awaited report into the future of Openreach on Tuesday, which will examine how the unit should be managed. Many rivals to BT, including Sky and TalkTalk, argue that it should be spun out of BT entirely.

MPs have also urged BT to "get its house in order", saying that the current management of Openreach lacks transparency and hinders other firms' investment in broadband infrastructure.

However, BT chairman Sir Mike Rake told BBC Radio 4 on Monday morning that this would be the wrong decision for the future of the UK's digital infrastructure given the investment BT has committed to Openreach.

"We believe very strongly, looking at it from a country perspective, that this would be the wrong time to break up BT and would distract us from the remaining investment to get superfast and ultrafast broadband right across the country in the next two to three years," he said.

Furthermore, as a sop to Ofcom, Rake explained that the company is willing to turn over much more control to Openreach as a unit within BT.

"We're absolutely willing to form an Openreach board that would have an independent chairman and a majority of independent directors. We're willing to give more authority to Openreach in determination of its capital investment programme," he said.

"We want to formalise more their ability to listen to communication providers so they're engaging with them, ensuring we can deliver for them as well as for BT Retail."

Rake also admitted that BT customer service, including Openreach, is not good enough, but that plans to bring all call centre staff back into the UK will help with this situation, as it has already done for EE.

Whether such concessions, no doubt already put forward to Ofcom during its consultation phase, are enough to stop a split remain to be seen. The report is due Tuesday so BT does not have long to wait.