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BT's rivals call for separation from network infrastructure division - Network Cables

A number of BT's rivals have called for the telecoms group to spin off its network infrastructure division into an entirely separate company.

Sky, TalkTalk and Vodafone have all raised concerns about the future of Openreach, BT's infrastructure division, which is responsible for managing and maintaining BT's wholesale network.

Both TalkTalk and Sky use BT's network of copper and fibre cables to deliver telecoms services to their customers; they pay BT a wholesale fee per fixed-line.

The duo are concerned about BT having an unfair advantage in the market, particularly now the company is set to acquire EE - the UK's largest 4G provider - and launch mobile services.

Openreach was created in 2005 to offer equal access to BT's network cables for all service providers, but BT's rivals believe the current set-up is no longer fit-for-purpose.

Dido Harding, Chief Executive at TalkTalk, said it is "crucial" that Ofcom seizes the opportunity to structurally separate the two companies.

"BT’s proposed merger with EE threatens to make a bad situation worse," she claimed.

"It will further starve Openreach of the focus and capital it needs and will extend BT’s dominance of the market."

Ms Harding said a fully independent Openreach, which focuses exclusively on infrastructure, would be incentivised to maximise fibre cable coverage and improve service quality.

This would end BT’s ability to erode competition, she added.

Jeremy Darroch, chief executive at Sky, agreed that there are "serious questions" about whether the existing UK telecoms structure can deliver the infrastructure, innovation and choice that consumers and businesses need.

"Structural separation of Openreach, the UK's only nationwide broadband infrastructure, is at the heart of creating a sustainable industry," he claimed.

Mr Darroch said Ofcom must take the opportunity to address Openreach’s conflict of interest as a subsidiary of BT, or risk extending the problems that are affecting the telecoms industry and its customers today.

Meanwhile, Vodafone UK's regulatory affairs head Matthew Braovac said his firm "absolutely thinks structural separation of BT is something that should be part of the digital communications review".

"We support it, we think it should happen," he stated. "We think it is a good way of cutting through an otherwise intractable set of regulatory problems.”

Written by for Comms ExpressADNFCR-1186-ID-801781338-ADNFCR

BT's rivals call for separation from network infrastructure division - Network Cables - Article Discussion

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