• Home
  • News
  • Big Data & Analytics
  • DevOps
  • Security
  • GDPR
  • AI & ML
  • Women in Tech
  • Cloud & Infrastructure
  • CIO
  • Deskflix
  • Events
  • Whitepapers
  • Spotlights
  • IT Leaders 250
  • Research
  • Delta
  • Tech Marketing Hub
  • About Us
  • Newsletters
  • Sign in
  •  
      • Newsletters
      • Account details
      • Contact support
      • Sign out
     
     
    • You are currently accessing Computing via your Enterprise account.

      If you already have an account please use the link below to sign in.

      If you have any problems with your access or would like to request an individual access account please contact our customer service team.

      Phone: +44 (0) 1858 438800

      Email: customerservices@incisivemedia.com

      • Sign in
     
  • Follow us
    • Twitter
    • LinkedIn
    • Newsletters
    • Facebook
    • YouTube
  • Register
  • Events
    • Upcoming events
      event logo
      How to overcome your Active Directory consolidation challenges

      In this web seminar we explore how best to go about assessing and modernising your AD as we reveal our research findings into AD health and readiness, consolidation challenges, and strategies for success.

      • Date: 20 Apr 2021
      event logo
      Mitigating Ransomware Attacks

      In this webinar, Javvad Malik, Security Awareness Advocate at KnowBe4, will share practical advice and real-world examples of how you can defend your organisation from the ongoing ransomware threat.

      • Date: 27 Apr 2021
      event logo
      Desklix: Digital Workplace

      The Coronavirus pandemic has had a huge impact on our lives with most organisations making a sudden switch to mass remote working. As restrictions are progressively eased, the impact continues, with organisations having to decide when to allow staff back into offices, what proportion of remote working should be expected, and how all of this should be supported.Take part in this virtual event to put your questions to the experts, and see what your peers have learnt from the pandemic, and how they plan to apply this understanding to 2021 and beyond.

      • Date: 12 May 2021
      event logo
      How to improve security whilst reducing workload and stress

      In this webinar we discuss the existing situation and its solutions, with automation one of the most promising.

      • Date: 13 May 2021
      • Computing UK, London
      View all events
  • Whitepapers
    • LATEST WHITEPAPERS
      Darktrace 120x194
      Cyber AI Response: Threat Report 2019

      This white paper details 7 case studies of attacks that were intercepted and neutralised by Darktrace cyber defense AI, including a zero-day trojan in a manufacturing company's network. Learn how Darktrace Antigena AI Response modules fight back autonomously, no matter where a threat may emerge, extending to the Cloud, Email and SaaS.

      Download
      Darktrace 120x194
      Cyber AI & Darktrace Cloud

      This white paper explores how cloud is a security blind spot for many organisations who struggle with the limited visibility and control in this new environment, where their existing security tools are often not applicable.

      Download
      Find whitepapers
      Search by title or subject area
      View all whitepapers
  • Spotlights
    • Spotlights

      Welcome to Computing's Spotlight section, where we focus in on particularly important themes and topics of enterprise IT.

      Intel logo

       

      Endpoint Management and Security Hub

  • IT Leaders 250
  • Research
  • Delta
  • Tech Marketing Hub
  • About Us
Computing
Computing
  • Home
  • News
  • Big Data & Analytics
  • DevOps
  • Security
  • GDPR
  • AI & ML
  • Women in Tech
  • Cloud & Infrastructure
  • CIO
  • Deskflix
 
    • Newsletters
    • Account details
    • Contact support
    • Sign out
 
 
  • You are currently accessing Computing via your Enterprise account.

    If you already have an account please use the link below to sign in.

    If you have any problems with your access or would like to request an individual access account please contact our customer service team.

    Phone: +44 (0) 1858 438800

    Email: customerservices@incisivemedia.com

    • Sign in
 
  • Telecoms

Should BT be forced to separate from Openreach?

BT, Vodafone, Virgin Media and Sky all have their say on whether BT should be separated from its network infrastructure arm

Should BT be forced to separate from Openreach?
  • Sooraj Shah
  • Sooraj Shah
  • @Sooraj_Shah
  • 05 February 2016
  • Tweet  
  • Facebook  
  • LinkedIn  
  • Send to  
0 Comments

When Ofcom announced it would be working on a strategic review of digital communications - the first such review in 10 years - there was inevitably going to be griping from some who perceive the playing field within the industry to be about as flat as Tibet.

It is something we've seen before with the launch of 4G and more recently with BT's acquisition of EE, with, in the case of the latter, many of BT's competitors complaining that the deal would give BT an unfair advantage by adding yet another communications division to its portfolio.

Ten years ago, the main issue under review was the creation of BT's infrastructure arm Openreach, whereas now the focus is on whether Openreach should be structurally separated from BT.

Vodafone, Sky and TalkTalk have all publicly stated that they think BT should be separated from Openreach, while BT has hit back stating that such a move would be bad for BT shareholders and bad for the UK as whole.

The general consensus among BT's rivals is that the telecoms giant enjoys a virtual monopoly of the communications market, even more so with the acquisition of EE. And furthermore, as it also owns Openreach, it has an edge over its rivals in the broadband space - as the likes of Sky, TalkTalk and Vodafone all rely on Openreach infrastructure to provide their customers with broadband.

According to Sky's chief strategy officer, Mai Fyfield, when BT switches a customer to fibre, it just hands over a notional fee from one internal division to another, whereas other providers face a real increase in costs that makes it less attractive to invest in upgrading customers.

"This poses long-term problems for competition, with the risk that BT will recreate its former dominance in retail customers," she wrote in the Daily Telegraph.

Matthew Braovac, head of regulatory affairs and competition at Vodafone UK, suggested to Computing that over the past 10 years BT has achieved an upside of around £4bn over and above the cost of capital for the product that it sells to the rest of the industry.

"There is a very serious issue of ‘over recovery' which creates a revenue stream by BT which is unmatched by any other operator in the industry and we think that creates anti-competitive distortions in adjacent markets," he said.

He added that having Openreach inside BT "creates incentives for BT to discriminate against other operators".

"We have a set of rules, which are intended to mitigate and reduce the effect of that incentive, but I think it's always difficult to police things like that, so I think a structural separation would be a much cleaner way of dealing with that issue," Braovac said.

What Braovac was referring to is the fact that BT and Openreach are in fact functionally separated. What this means, according to BT's director of regulatory affairs, Mark Shurmer, is that there are rules regarding how Openreach interacts with BT and its external customers.

"It provides the same products and terms and conditions including price to all customers including BT and there are certain ringfences about information sharing - they have to tell everyone when a new product launches, not just BT. There are also very stringent accounting rules, and indeed it would be obvious if we were using profits from one side of the business to another - you can see from publicly available records that it's not happening," Shurmer said.

 

1234

Further reading

MPs call on Ofcom to separate 'unambitious' BT and Openreach
  • Networks
  • 25 January 2016
EE brand to remain as BT restructures following mobile acquisition
  • Communications
  • 01 February 2016
BT suffers major broadband and phone outage across the UK
  • Networks
  • 02 February 2016
BT-EE deal approval by CMA could be 'extremely damaging' says trade association
  • Mergers and Acquisitions
  • 15 January 2016
  • Tweet  
  • Facebook  
  • LinkedIn  
  • Send to  
  • Topics
  • Telecoms
  • BT
  • Openreach
  • EE
  • Vodafone
  • TalkTalk
  • Sky
  • Ovum
  • TechMarketView
  • OfCom
  • CMA
  • Competition and Markets Authority
  • Gavin Patterson
  • Sharon White
  • Virgin Media
  • fibre-to-the-cabinet
  • Fibre-to-the-home
  • Fibre

More on Telecoms

Time to travel lighter
Peter Cochrane: The moribund management thinking outed by Covid

Modern networking technology has revolutionised everything – not that you’d know it

  • Telecoms
  • 13 April 2021
BT faces possible £500m claim for overcharging landline-only customers
BT faces possible £500m claim for overcharging landline-only customers

In 2018, BT had agreed to reduce its landline prices from £18.99 to £11.99 a month for about 900,000 customers

  • Telecoms
  • 18 January 2021
Revving up the 5G rollout at Three UK

Three's 5G rollout means expanding capacity on many fronts at the same time, explains network strategy and architecture manager Firoz Vohra

  • Telecoms
  • 09 October 2020
Greg Clark MP is chairman of the Science and Technology Select Committee
Removing Huawei would cost billions and customers could experience blackouts, BT and Vodafone tell MPs

Telecoms giants urge caution, while Samsung says it's ready to take Huawei's place in the UK's 5G networks

  • Security
  • 10 July 2020
T-Mobile network outage affected thousands of customers in the US
T-Mobile network outage affects thousands of customers in the US, experts reject claims of DDoS attack

Widespread routing issue affected T-Mobile's voice and text service, the company reveals

  • Telecoms
  • 16 June 2020
blog comments powered by Disqus
Back to Top

Most read

Covid results emails may breach GDPR
Covid results emails may breach GDPR
Apple and Google block NHS Covid-19 app update over privacy issues
Apple and Google block NHS Covid-19 app update over privacy issues
University of Hertfordshire cancels live online teaching following cyber attack
University of Hertfordshire cancels live online teaching following cyber attack
Microsoft patches five zero-day bugs in April 2021 Patch Tuesday update
Microsoft patches five zero-day bugs in April 2021 Patch Tuesday update
Darktrace reveals plan to float in London at the end of the month
Darktrace reveals plan to float in London at the end of the month
  • Contact
  • Delta
  • Marketing solutions
  • Enterprise IT Events
  • Incisive Media
  • Terms & conditions
  • Policies
  • Careers
  • Privacy Settings
  • Twitter
  • LinkedIn
  • Newsletters
  • Facebook
  • YouTube

im_logo

© Incisive Business Media (IP) Limited, Published by Incisive Business Media Limited, New London House, 172 Drury Lane, London WC2B 5QR, registered in England and Wales with company registration numbers 09177174 & 09178013

Digital publisher of the year
Digital publisher of the year 2010, 2013, 2016 & 2017
Loading