With the Battle of Openreach over it is time to enjoy the peace dividend
BT and Ofcom have been at logger heads over the once a decade review on the communications market but that is now all over and today may be seen as day 1 of the race from just 2.36% of full fibre coverage from all operators to coverage in the 80 to 90% region by 2027.
"This is a significant day for phone and broadband users. The new Openreach will be built to serve all its customers equally, working truly independently and taking investment decisions on behalf of the whole industry – not just BT.
We welcome BT’s decision to make these reforms, which means they can be implemented much more quickly. We will carefully monitor how the new Openreach performs, while continuing our work to improve the quality of service offered by all telecoms companies."Sharon White, Ofcom Chief Executive
"I believe this agreement will serve the long-term interests of millions of UK households, businesses and service providers that rely on our infrastructure. It will also end a period of uncertainty for our people and support further investment in the UK’s digital infrastructure.
This has been a long and challenging review where we have been balancing a number of competing interests. We have listened to criticism of our business and as a result are willing to make fundamental changes to the way Openreach will work in the future."Gavin Patterson, BT Chief Executive
So what is changing? Well some of the requirements have already been met with the creation of the Openreach board, but there is more to do.
- BT to be dropped from all Openreach branding
- 32,000 staff to be undergo TUPE and be directly employed by Openreach. This is set to to be one of the largest corporate TUPE shifts ever, and will start once pension arrangements are in place. TUPE means employees retain their years of service and other rights.
- Openreach will be a legally separate company within BT Group and will have its own 'articles of association'.
- Openreach Chief Executive to be appointed by the Openreach Board and accountable to the board. BT Group will retain a veto on the appointment, but to use that it would require approval from Ofcom.
- The physical assets such as the local loop will be controlled by Openreach alone
- Requirement to have confidential consultations (i.e. not disclosed to BT Group) with customers (e.g. Sky, TalkTalk and Vodafone)
- Control over budget allocation and strategy direction
For those who want to read the full announcement a copy is available at www.btplc.com/UKDigitalFuture
So at last we have some certainty back in the UK telecoms market and the work of rolling out more FTTP and shifting to delivering G.fast in volume can begin, plus the work on PIA2 will hopefully start to bear visible changes as other operators start to deploy more full fibre. It may turn out that PIA2 is more useful in cities allowing operators to join new business premises to existing networks but with a lot less roadworks.
On the aspect of customer service and fault and install times, we hope that Openreach who has been meeting the Ofcom metrics will now move quickly to constantly outpace any metrics Ofcom sets. For the average consumer this means that installs will happen quicker and faults once through the Chinese whisper support systems and in the hands of Openreach will be dealt with quickly and fixed first time a lot more often. For those people in the Openreach recruitment train, we know some have been waiting for a long time for their contract, hopefully today will see those recruits getting good news and the workforce increase to a size where very few or hopefully no third party contractors are needed.
For the operators such as TalkTalk and Sky, they have now got the Openreach PLC they pushed hard for, but now is the time to knuckle down and make things work and work quickly. If once Openreach completes all the changes, things just settle down into business as usual then all the campaigning and PR battles will have achieved little beyond creating uncertainty and diverting attention from the task of more full fibre roll-outs.
"The real story here is the UK’s shocking ‘fibre gap’. Whilst it is welcome that these time-consuming negotiations seem to be at an end, there is nothing in this announcement to suggest Openreach will now start to build the fibre infrastructure this country needs. Ofcom’s focus needs to shift to encouraging alternative fibre builders to do the things Openreach can’t or won’t do – whatever its legal status.
CityFibre is well placed to take on that challenge and to meet Ofcom’s strategic objective of reducing the UK’s reliance on Openreach to get the job done. The substantial Government funding for fibre announced in the budget this week will help to accelerate our own full fibre rollout programme."Mark Collins, Director Strategy & Policy at CityFibre (added at 11:05am)