BT Openreach arm to be monitored by new OFCOM unit

The UK's communications watchdog is to set up a dedicated unit to monitor whether BT's Openreach infrastructure arm is delivering on its targets following its separation from the telecoms giant.

BT Tower in London.

Ofcom said the new Openreach Monitoring Unit will assess whether the new company is delivering on its targets, and whether the rules are being observed by BT.

It added that if it emerged that the reformed Openreach was not working, or if BT failed to comply with its commitments, it would revisit the model and “consider new measures”.

In March, BT reached an agreement with Ofcom to legally separate its infrastructure arm Openreach following a drawn-out battle with the regulator.

The telecoms giant agreed that Openreach would become a distinct, legally separate company with its own staff, management and strategy, while remaining a subsidiary of BT.

BT said it welcomed Ofcom’s announcement and reiterated that both BT and Openreach are already taking positive action towards implementing their new commitments.

“There are still several preconditions that need to be met before Openreach becomes fully incorporated, but it’s clear to see the company is already pushing ahead with its reforms and is focused on serving the long-term interests of millions of UK households, businesses and service providers that rely on its infrastructure,” it said.

Ofcom said it expected the reformed Openreach to “engage with industry to deliver widespread fibre networks, offering fast, reliable broadband”.

“The new company should provide a good service to meet the needs of all the people and businesses who rely on its network, together with a step change in quality of service. We will measure how far Openreach is improving its network and helping to deliver better quality of service.”

BT will not escape scrutiny either. The regulator warned that the FTSE 100 firm will be closely monitored to see whether it is complying with its new commitments, and creating a “successful culture” to promote Openreach’s independence.

“Ofcom will closely monitor BT’s compliance with its new commitments, and how effectively Openreach serves the whole industry,” it said.

“The unit will assess whether new governance rules are being observed, and whether Openreach is acting more independently of BT, making its own decisions, and treating all its customers equally.”