UK businesses will benefit from more diverse and competitive services as a result of the creation of Openreach, according to analysts.

Robert Bamforth, senior analyst at researcher Quocirca, says the new BT communications access division – agreed in September 2005 with telecoms regulator Ofcom – will broaden the competitive landscape for internet protocol (IP)-based services.

‘It will open out competition. Given the collision of fixed with mobile services and voice and data on IP networks, Openreach could be responsible for opening up more possibilities downstream,’ says Bamforth.

‘With such diverging requirements, businesses will find it hard to have them fulfilled by one provider, allowing for others to provide more niche services for more diverse needs.’

Openreach was created to facilitate and manage a more transparent and fair separation of BT’s infrastructure, to ensure competition between service providers and BT’s other divisions that need to access the ‘local loop’ between customers and their local exchanges.

But these lofty ideals will remain just that if Openreach chief information officer (CIO) Colin Windsor does not update its IT systems, facilitating the biggest UK regulatory change since parent company BT was privatised more than 20 years ago.

‘Openreach has a number of products, which it now has to serve on an equivalent basis,’ says Windsor.

‘Each of them is managed by BT with a range of systems and the challenge we have is that these systems were designed to meet different industry needs. Those needs did not include the likes of BT Wholesale and BT Retail divisions actually being customers of Openreach as the central access division.

‘So over the next year and a half, and in what are fairly quick timeframes, we have to deliver essentially a new platform that can meet the whole needs of the industry, including BT Retail and BT Wholesale.’

Apart from centralising previously disparate network access systems and 25,000 engineers across BT’s divisions, Windsor says technological change will also represent a major upgrade.

‘Frankly, all the systems we have built to support the industry have to essentially be replaced with a brand new infrastructure capable of fairly significant volumes because, as well as all of BT, we’re going to have to cope with the AOLs, Yahoos and Easynets of this world,’ says Windsor.

‘A massive platform has to be put in place to actually offer the equivalent service that the industry is expecting.’

Infrastructure change presents a fundamental opportunity for Openreach, says Windsor, who recognises that the firm has a massive range of systems.

‘Some of the systems are siloed, addressing particular product needs. So there is an opportunity to replace a lot of little systems with a couple of major platforms, like a customer relationship management platform and billing platform, for example,’ he says.

‘Our whole intent is to build one common stack that supports all of the Openreach products. That has a lot of benefit to our customers.’

Openreach – which officially began trading at the beginning of 2006 – will concentrate on replacing IT systems used to administer the process of unbundling local loop lines for broadband-speed technologies.

Ofcom hopes that local loop unbundling (LLU) will help the introduction of new, or cheaper, services such as voice over IP (VoIP) telephony, video on demand and other content-rich media services. And as well as giving the telecoms giant the opportunity to update systems and centralise and overhaul processes, Windsor says the agreement with Ofcom will promote better lines of communication with other industry members.

‘We’re using this opportunity to really closely engage with this industry, far closer than I think we ever have done before,’ he says.

‘We’re being very open and transparent with members of the industry and have had quite a few collaboration workshops with ISPs so far, looking at things such as interfaces, processes, deployment and testing.’

Openreach is covering a range of areas to ensure that when these systems are initiated, the industry is ready for them, says Windsor, and he believes it will deliver a good level of service.

‘Another thing we’re doing is working at an industry level on testing environments, to which the ISPs can have access, and which is something that wasn’t always available in the past. The next thing will be a major resilient architecture,’ he says.

Windsor says initial IT work and expenditure will deliver equivalent systems and processes, establishing a core integration platform.

‘It’s a fairly major systems programme and, from BT’s perspective, we have agreed dates with Ofcom about when we have to meet these system change requirements,’ he says.

‘Obviously, Openreach is a big process and transaction shock to our systems and there will be a lot of transactions to process, so this new platform has to be designed to scale.’

Openreach is scheduling the first platform release prior to the first Ofcom review of its activities in June 2006.

‘There’s a massive amount of work in re-engineering these individual product systems onto the new capability,’ says Windsor.

One such system will manage the appointment process for providing manual updates at local exchanges in response to new broadband customer requests.

Despite relying heavily on its own Indian software development resources, and those of other well-known Indian software houses, BT will use UK-based

IT expertise by expanding internal teams and using specialist IT firms, says Windsor.

‘This is mainly because of the pace of development necessary. So we’re looking at extended test cycles. We are going to have to do a lot in a short space of time,’ he says.

‘The more geographical spread we can get for our testing cycles the quicker we can get them going for nearly 24 hours a day. There’s a volumetric capability: a lot of people are needed to build this stuff, and we are going to have to look outside of BT to get it all done.’

A lot rests on the success of the work undertaken by Windsor in the next six months – and he has a lot of expectations on which to deliver.

Openreach facts and figures

• Openreach will cost BT Group about £70m to establish in the course of the next financial quarter
• The division manages 6,000 exchanges, controlling 30 million customer lines
• The Openreach network is used to accommodate about 300 million telephone calls every day
• It is used to provide some 350 million internet connections every day
• The organisation employs 30,000 staff, including 25,000 engineers
• Engineers make 3.6 million visits each year, equating to 11,000 home and office visits every day to install new lines, and to carry out repairs and upgrades
• Openreach operates a fleet of more than 22,000 branded vans