BT Set to Avoid Openreach Split as Ofcom Opts for the Middle Ground

The UK telecoms regulatory will publish the outcome of their ‘Strategic Review of Digital Communications‘ on Thursday and unsurprisingly there have been some leaks, which appear to confirm our expectation that Ofcom will NOT move to split BT from control of its national phone and broadband network (Openreach).

Instead Ofcom is expected to impose greater separation of Openreach from BT, which could involve giving rival ISPs more access to Openreach’s national network of cables and telephone exchanges (a highly likely outcome). Potentially Ofcom may also require BT’s network access division to have its own separate board, which the operator won’t be very happy about.

However it’s understood that the regulator will opt to keep the option of full separation on the table, which could be used as a bargaining chip should BT move to aggressively oppose their new measures. A BT source told The Telegraph that this may yet result in separation: “It could get to the point of separation by the back door” (i.e. if the price of Ofcom’s new regulation feels too high to stomach).

Naturally all of this is to be accompanied by a variety of other changes to market regulation, which will go well beyond the question of Openreach’s separation. We’ll find out more on Thursday.