MPs tell BT to invest more or face having business broken up

BT needs to invest more in its infrastructure arm '“ or risk having its business broken up, a committee of MPs has warned.

BTs Openreach has previously been criticised by watchdog Ofcom. Picture: Malcolm Cochrane
BTs Openreach has previously been criticised by watchdog Ofcom. Picture: Malcolm Cochrane

The culture, media and sport committee said in a report that BT’s underinvestment in its Openreach division could run to hundreds of millions of pounds a year.

The report said BT “appears to be deliberately investing in higher-risk, higher-return assets such as media properties”, indicating its news and consumer web pages – and failing to invest in infrastructure and services through Openreach, resulting in poor customer service.

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Openreach has previously been criticised by watchdog Ofcom, which last year fell short of recommending it be separated from BT, but criticised the quality of its service.

The MPs said BT should up its investments and give Openreach more freedom over how it spends its money.

Labour MP Ian Lucas, a member of the committee, claimed there were “strong arguments” for BT to be broken up.

He said: “The system to date has worked very, very well for BT and Openreach, but less well for customers, in particular business customers on small industrial parks who have a desperate need for super-fast broadband.”

BT said it was “disappointed to be criticised” and added that it was in talks about giving Ofcom more autonomy.

A spokesman said: “As the report acknowledges BT’s investment has made the UK a broadband leader among the major economies in Europe.

“Openreach investment is 30 per cent higher than it was two years ago and it will grow again this year. We’re already pumping in hundreds of millions of pounds of extra money and we’ve committed to invest a further six billion pounds over the next three years.”

He added: “We agree that service levels have to improve and yesterday we announced that we’re making significant progress in this area.

“Separating Openreach from BT would lead to less investment, not more, and would fatally undermine the aims of the committee.”

Alex Neill, director of policy and campaigns at consumer group Which?, said: “We welcome today’s committee report. It’s clear that Ofcom must move quickly to make sure Openreach genuinely improves service for customers who have been let down for too long.”