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VIDEO GEO UK Says it is Impossible to Take on BT’s Broadband Dominance

Thursday, January 17th, 2013 (3:37 pm) - Score 1,307
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Chris Smedley, the boss of dedicated fibre optic provider GEO Networks, has warned in a new video interview that without better regulation from Ofcom it will remain “almost impossible to take on BT” in the United Kingdom’s broadband market; especially in terms of gaining economically viable access to the operators cable ducts and poles.

The interview stems from GEO’s “reluctant” decision to exit the governments Broadband Delivery UK (BDUK) framework during November 2011 (here), which at the time was partly blamed on the “heavy restrictions” that had been imposed upon BT’s Passive Infrastructure Access (PIA) product.

PIA was designed to save money by giving rival ISPs access to use BT’s existing cable ducts and telegraph poles to run their own fibre optic connections, which would be cheaper than building a new alternative broadband infrastructure. Unfortunately GEO found that the business case for PIA didn’t quite stack-up.

In the new interview Smedley states that the idea initially “looked pretty good” but PIAs use as a product was eventually “limited to residential broadband provision.. which by value is a minority part of the telecoms market in the UK“; this meant that GEO and other ISPs couldn’t deliver services to the more lucrative business, public or mobile sectors and serving just homes would not be enough to turn a profit.

A BT Spokeswoman told ISPreview.co.uk today:

Ofcom defined the regulatory parameters of the PIA product and clearly stated that its primary use is for NGA based services. They concluded that there is no regulatory requirement for BT to allow other companies to use its ducts and poles to provide backhaul services, mobile/wireless connectivity or leased lines. BT already provides plenty of other wholesale access options for such services.”

Smedley told Telecom TV’s interview, “Without the regulatory backup, without the intervention in this market.. without that it’s just too much of an exposure to our very successful other business“. The disgruntled CEO then suggested that any operator, such as BT, that takes public money from BDUK to improve the national broadband network should be required to adopt fibre leasing (Smedley described this as being the equivalent of local loop unbundling in the copper network).

UPDATE 4:55pm

Added a comment from BT.

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Mark Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he is also the founder of ISPreview since 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
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68 Responses
  1. FibreFred

    But businesses can get these speeds already via Ethernet etc?

    Why didn’t he just admit he’s miffed as they are not allowed to delivery fibre to business premises and totally undercut BT’s own offerings? I mean.. that is what he’s saying?

    Sorry there’s no profit in the home market

    This is the issue, people are screaming about fibre, about fibre competition, but in reality no-one else wants to put their money in and actually do it.

    He’s saying there is no profit in delivery ftth via PIA or by building your own ducting to homes.

    I’m positive that even if PIA was totally free or a ridiculously low sum ISP’s still would not be interested, even if you could have the duct space gratis you still have to pay for the GEA handover , blow your own fibre, install your own kit in the home etc etc, it all adds up, take away the duct rental and I bet you no other ISP’s will be interested.

    • DTMark

      The start point for the BDUK project was to get all the interested players around the table and ask how BDUK/the State could facilitate the rollout of a competitive national broadband network.

      All the players except one would doubtless have said “The State would need to ensure that it is feasible to lay the cables, taking into account build costs and ROI”. In other words, “we could do the tech, but you’ll have to organise the physical ducting and access”.

      If what you’re suggesting is that had BDUK gone down that route, and provided said players with the necessary ducts and poles – which would either have had to happen through possible recapitalisation or renationalisation of BT, or, more likely, building again from scratch – that the likes of Sky and Talk Talk would have had no interest at all, I think you’re probably wrong on that.

    • FibreFred

      Yes I am suggesting that even if access to ducts were free Sky/TT/Virgin would not be interested in laying fibre to homes. GEO have said themselves there’s not enough profit

    • FibreFred

      You need to appreciate LLU is nothing at all like FTTP. LLU was easy, stick a DSLAM in an exchange and you instantly have access to hundreds of customers a no brainer at no effort

      With FTTP you have to train from scratch or retrain an entire workforce to work in ducts/poles and blow fibre and install end user kit, a huge expense even before you’ve laid 1m of fibre.

      On top of that you’d have to invest huge amounts of money on backhaul as your new product is going to consume a lot more bandwidth than what your old products do

      All for what

      You hope people will sign up? FTTC sign ups have been less than ideal despite very good speed increases

      And if you do manage to sign people up, what are you charging them? £20, £10 extra than what you charged them before

      This is why other ISP’s aren’t committing as there is so little money to be made. These ISP’s will moan and moan but they don’t care about me and you getting better broadband, like GEO they are chasing the bigger fish

    • DTMark

      I do appreciate the difference. ADSL and LLU were simply stopgaps which were always going to date fairly quickly. VDSL is another stopgap with the same inherent issues. I’m looking at the medium/longer-term picture for all and even the shorter term picture for some.

      Your comments about backhaul are supporting the scarcity model – the objectives in this industry are flawed, since ISPs hiding behind BT as the infra provider don’t necessarily want more bandwidth to be available as it has to be paid for.

      So far as signups are concerned – that the ROI is long term is one of the most significant barriers to rollout which is why the State have had to step in and fund this in some way. I just think it’s the wrong way and the wrong model to use.

      In the end, I’d reckon the takeup would eventually get to near 80% or better over the longer term.

      I’m betting the signups are especially poor in cabled areas compared with non cabled areas, and that this is a sore point for BT having seen their competitor march forward with technology while they sat sulking and trying to milk the old tech for everything it’s worth.

  2. DTMark

    From the State Aid document, 83a, emphasis mine:

    (a) In exchange for receiving state support, the direct beneficiaries of the BDUK scheme will provide third parties with *effective* wholesale access for at least *seven years*. In particular, the access obligation imposed also includes *the right to use ducts or street cabinets* in order to allow third parties to have *access to passive* and not only active infrastructure.

    • FibreFred

      PIA then?

    • DTMark

      Not as it stands, no. It says “effective”.

    • FibreFred

      Well that is for Ofcom to sort out. Opening up PIA to businesses would be suicide for BT so I can certainly see why.

      Businesses have access to these speeds already as I’ve said

    • DTMark

      Yes, based on the same scarcity model we’ve always had which results in high prices and/or poor services because of a lack of competition.

      SMEs cannot afford, say, forty thousand pounds to have an internet connection (leased line) installed. Which of course costs nowhere near that to provision, couple of man days to shove some fibre down some ducts, but when there’s a choice of one based on a creaking old phone network, the price goes sky high.

    • FibreFred

      Again total simplification (couple of days duct work) as per my last comments re this. Is that how you run a business? Direct labour cost + materials = price to the customer?


    • DTMark

      I’m sure I posted this before:

      When there is an abundance of choice, what happens to prices?

      When there is a choice of one, what happens to prices then?

    • FibreFred

      But I’m saying providing high speed WAN access to business is a market that works, it has been working for a long time.

      You are talking about different businesses, business that expect to pay peanuts for good access.

      If your business relies on high speed broadband but you cannot get it why be in that business or specifically why be in that business in that area?

      Its like saying, to make my business work I need 50 units of warehouse space, hmmm I can only afford 2 units, can we make those other units super cheap for me whilst other bigger business still pay higher rates?

    • FibreFred

      As for

      “When there is an abundance of choice, what happens to prices?”

      Yes and as you can see it really has worked for the broadband industry in the UK (ADSL/LLU etc) , look how its prospered. We have one of the cheapest if not the cheapest broadband prices in the world, its so cut throat there’s hardly any margin in it anymore. If people paid higher more realistic prices ISP’s might make better profits and dare I say it spend a bit of money actually rolling out networks of their own.

    • FibreFred

      Just to add 🙂

      So if it doesn’t really cost that much and its just a couple of blokes blowing fibre for a few days, why can’t you get some other provider to bring fibre to your village via PIA? PIA isn’t THAT pricey, I cannot believe for one instant that PIA is the one single reason ISP’s can’t bring fibre to your village.

      Plus they’d just pass some/all of the charges onto the end customer, so what is stopping another telco bringing fibre to your village (and any other rural village)

    • DTMark

      I think you may tar all businesses with the same brush. The stopgap solutions (all DSL based tech) support cheaper prices because there isn’t much investment needed, relatively speaking. So in a way, BT are their own worst enemy having gone for “cheap” as opposed to “quality”.

      The UK cannot expect to compete with other countries if connectivity here, say a basic 15Meg down 5Meg up (or symmetric), costs £600+ over EFM (1 year) and that’s only if you’re located within touching distance of the exchange anyway, otherwise, a lot more – if other comparable countries have businesses who can get similar connectivity for say £150 a month or less because they have seen investment in the network.

      The other way of expressing this, the scarcity model, is to argue that there was never any need for ADSL in the first place, because anyone who needs connectivity should expect to pay for a leased line/bespoke connection because broadband services are a luxury.

      My comments about our village are specifically about the cost of laying a few km of ducting along two roads which I cannot believe is that expensive to do. The reason nobody will do it is twofold – BT’s ability to respond on the cheap using existing ducting (if it’s serviceable) and the lack of ROI. Neither of those have to do with the cost of laying some ducting as such, taken independently.

    • FibreFred

      So the issue of getting (or not getting) fibre to your village isn’t BT’s fault at all, its a lack of ROI

      And you can’t compare us to other countries based on single area like broadband without considering a gazillion other variables.

      You say you can’t get fibre to your village as no-one will invest as the returns are too low/too long term yet complain high speed broadband is too expensive for business etc, I’m sure there’s a link there somewhere 🙂

      I really don’t think bringing fibre to people’s homes will save the UK

    • FibreFred

      Serious question DTMark, have you asked Virgin to quote for bringing their network to your village?

    • DTMark

      Not yet, though I am obliged to because it’s the service specifically requested more than any other.

      The nearest point of presence is about ten miles away, so I don’t hold out much hope of an affordable quote.

      That said, as previously noted, the village would be very east to run ducting through, akin to an urban style layout along the two roads.

      One reluctance I would have is that cable is not futureproof – although 445Meg down 125Meg up is certainly possible with the current network model, if I remember those figures correctly, I’d ideally be looking for something based on FTTP.

    • FibreFred

      10 miles, not that far though? A few blokes a few days work to do some ducting 🙂

  3. zemadeiran

    “Why didn’t he just admit he’s miffed as they are not allowed to delivery fibre to business premises and totally undercut BT’s own offerings? I mean.. that is what he’s saying?”

    Surely this is what an open network is all about? whether your a business or household provider does not really matter. What is really important is that the access is available to all.

    Undercutting your competitors offerings is usually called competition…

    If companies like C&W, O2 et all have previously laid down fibre to back haul LLU then why would they not take advantage of the Countries network ducts?

    PIA access without restriction to home fibre would absolutely destroy BT and their monopoly due to real open access, THAT is the real reason.

    • DTMark

      When the EU realises what we’ve actually implemented, in contravention of the State Aid guidelines both in actuality and in spirit, I forsee a future government having to stump up the cash to pay them back the subsidy.

    • FibreFred

      Of course it is the reason 🙂

      But there is no issue in the business market selling access to businesses. BT, C&W , Global Crossing, Virgin etc… all selling business circuits to businesses, have been for years.

      That market is working

    • DTMark

      One of the other aspects of the rollout of a competitive broadband network is the difficulty in getting the ROI to stack up in rural deployments.

      Done correctly and with just a little imagination, some semblance of a National Broadband Network helps to offset this by ensuring that the Provider(s) who want the densely populated areas and/or businesses also have to run the fibre in the neighbouring and outlying rurals of that area, guaranteeing the total overall ROI.

      Add in a reverse tax incentive (e.g. tax offset for every premise connected to the new network) and you begin to motivate the players correctly towards the end goal.

      These things could have been done right; there will always be some “hard to reach areas” (not where old phone cable D-sides are too long, I mean genuinely remote areas), but there was and is no need to accept a “final third”.

      What’s most mysterious is that random commentators on the internet can come up with all sorts of ideas for these things, yet BDUK either cannot or will not imagine a solution.

    • Somerset

      Please describe a National Broadband Network in detail. And how it would fit in with the existing networks of VM, C&W, BT etc.

    • DTMark

      If I described it in detail I suspect the post would be longer than most of the month’s articles put together. I believed that it was BDUK’s job to do this, that’s why it has so many staff and costs us so much money.

      Have a look at how other countries have looked to solve this to varying degrees, for instance Australia, which has a lower population density than we do. And/or, take a look at what the State Aid document says.

    • Somerset

      Australia – lower density but mainly located in a few dense areas. One organisation rolling it out, and NBN Co is not like BDUK.

      And ‘including an Australian Government investment of A$27.5 billion’.

      So how have other countries solved this?

    • Somerset

      If competition is so important for telecomms infrastructure why not for gas, electric, water and drains?

    • FibreFred

      Good point Somerset

      If a new electricity feed or gas main is required in a certain part of the country only one physical supplier will install it, why do we need multiple physical suppliers?

    • Bob

      THe fact that not one single provider has taken up PIA on a commercial basis(that excludes pilots) indicates it is not a level playing field. So far OFCOM has ignored the fact that there is no competion with FTTC

    • DTMark

      Other utilities are not the same.

      For instance –

      Water: it isn’t the case that households need an ever-increasing supply of the volume of water. The pipework does not need widening to serve higher flows.

      Gas – the same.

      Electricity – at some point it might be necessary to step up from 240v, I’m no electrician, but I don’t see that on the horizon.

      The above differ from broadband in that they are considered to be utilities, that they are necessary whereas broadband is not. This is a backward view.

      And the inherent dangers mean that those are very tightly regulated. For example if you report a gas leak you don’t expect to wait a week and then have the “wrong type of engineer” sent round by which time there has been a major explosion.

  4. dragoneast

    It seems to me that Ofcom’s hands are tied to an extent in that any option they devise has to be financially viable for BT as the regulated utility. Yes, there is room for argument, which there frequently is, on the detail. The backstop, oft-repeated as some “throwaway” remark, of re-nationalising or letting BT “go to the wall” isn’t to my mind a viable option – for those people who have been asleep for the last ten years – the government has to try and recover the nation’s finances after our previous excesses, not ruin them. At the end of the day it makes no difference – whether state-run or not, funds have to be attracted from the international markets, and they aren’t a charity: they demand an internationally competitive return and don’t have some nice “soft” spot for the UK. We are on the brink of losing our AAA rating, and are on the slide. We don’t just “snap our fingers”, pass some law, and become “like” Australia (or anywhere else you care to mention) outside our dreams – there are a myriad of different factors in play, and it’s not easy over there either, with numerous low and not spots where the network appears to be going no-where. By the way, where does Britain generate its wealth these days; oh of course, I forgot, the banks . . . yeah. BT seems to me to be one of our “national champions” alongside the other laughing stocks of BP, BG and National Grid; BAe, Rolls Royce and . . . who else (apart from the shops that sell us imports so effectively)? We so like to “dis” British business don’t we? The Chinese, Korea and the US won’t roll over and die of fright once we’re fibred – it’s a very small part of the picture – their (and others’) success is down to making the most of what they’ve got. (If anywhere it seems to me that London and big city “low spots” have the best need cases to support wealth generation, not the villages of middle England – and I say that as one of the residents of the latter).

    I applaud anyone’s efforts to improve your local situation, and did so myself, but fortunately I was able to do it without ruining the rest of the country in the process. Competition may be good, but it doesn’t make it a God to be worshiped at any price.

    • DTMark

      Digressing to wider economics, my view is that the UK is nearly “finished”. This isn’t a “recession” in the normal sense, and that the pound sterling will be toast by 2018 as we have major debt rollovers in 2017. We’ll probably just print the money rather than borrow it (say, a trillion pounds more QE) but by then inflation will see pensioners dying in their masses unable to heat their homes, for instance, Tottenham-style riots all over the country and the economy in tatters.

      So in that sense, there’s a debate to be had about whether for example HS2 or a broadband network would be a better investment at this point. The UK is so infrastructurally poor there is so much to do.

      The UK is rapidly heading towards fascism (corporatism) and the goal of large companies is to become “too big to fail”. (BT, G4S, the banks and so on). At which point, those companies effectively become part of the State. My view is that this line should never be blurred and that capitalism is perferable to National Socialism for corporates.

      Back to broadband – part one: recognise the problem, two, set the goal (and bear in mind the goal is a continually moving one, it is not fixed e.g. 2Meg narrowband is already out of date), three – accept that we simply don’t have an infrastructure over which to deliver it, four – devise technical solutions which are all necessarily fibre based in the main, probably with Wi-Fi for some areas, five – get all potential investors around the table and see if all of them can be satisfied, if not, if most can be satisfied, six – find out, from them, how we can get there and what’s needed (largely, ducting) and seven – facilitate that through largely private investment. (Very different from “bung some cash to a private company”)

      BT could elect whether to be involved or not. It could choose to go its own way and upgrade to compete or not. The end goal is removal of reglulation and the disbanding of OFCOM. At which point all players may sink or swim on their own merits.

  5. New_Londoner

    The naiveté of some of the above posts is truly astonishing. If you take a moment to think about what Chris Smedley is saying, you could conclude that he’s really looking for a free, or at least subsidised, ride funded by another company’s shareholders.

    Looking at state aid, I assume the posters understand that the BDUK project was to specifically provide faster broadband in areas where there was clear market failure? If it had chosen to address that by, as has been suggested by some, building a national duct network that anyone could use for the provision of any service, then it would immediately fall foul of state aid rules by interfering in other markets where there was no evidence of market failure.

    If it tried to purchase the BT duct network, assuming it was for sale, then this could almost certainly be treated as state aid too, and so would be open to challenge.

    And as for nationalising Openreach, again you are assuming it is for sale. Also, presuming people read the papers, where exactly do you think the money would come from to fund the purchase? And please don’t say something like “cancel HS2”, as the expenditure on this is spread over many years and does not start in earnest for some years to come. If you wanted to buy Openreach you’d have to pay its owners up front, again assuming they decided it was for sale.

    IMHO the bottom line is that a number of companies make a lot of noise about their thwarted ambitions but do not appear to have credible business plans in place with sufficient capital to stand a realistic chance of turning these ambitions into reality. So instead they blame others – either that, or they are simply making relatively controversial statements in order to generate free publicity!

    • FibreFred


      Besides, happy to be corrected BT Openreach don’t own the network do they? They maintain it on behalf of BT so splitting our BT Openreach only splits out the maintenance ?

      Why would BT ever sell the access network? Put yourself in their shoes, would you do it if it were your business?

      So if the shoe was on the other foot and GEO had these assets, would they sell them off to create a truly open network or offer duct space at virtually no margin

      Don’t think about it too long 😉

    • nicknick

      “The naiveté of some of the above posts is truly astonishing.” – a bit pot and kettle I think.

      I don’t think anyone has said the govt should buy Openreach (unless that ‘spin’ is your scaremongering intention). Govt has the power to force the breakup of companies if it feels they are too dominant in a market. So breaking BT into a ‘national grid’ i.e. Openreach and then BT as retail and wholesale is viable, and eventually the only way you will ever get real competition (as the BDUK debacle clearly demonstrates)

      However, Govt really wanted all the money to go to BT, and devised a process and set of rules to make that inevitable (and I believe is trying the same ‘trick’ with the city fibre networks)

    • Somerset

      How would that make ‘real’ competition? And the cost of compensating the shareholders?

    • FibreFred

      But how would that work nick, Openreach don’t own the network do they? They just maintain it.

      BT would have to sell it, but.. to who?

    • nicknick

      Once upon a time BT owned a little mobile company………I could go into the exact details of how the asset transfer worked, how shareholders got dual shares, how no ‘sale’ took place etc etc, but I can’t be arsed, but those of you with the time can always look it up……..

    • FibreFred

      Fair enough but that was a little mobile company a small arm of the business, its not the same

      If you bought a goose and one day it started to lay golden eggs, would you sell it? 🙂

    • DTMark

      Is there such a company as BT Openreach?

      I thought that the company was British Telecommunications Plc, of which Openreach is simply an internal division.

      Happy to be corrected.

      “Why would BT ever sell the access network”?

      A government plan to implement a National network (ducting State, fibre private) would mean BT could either come on board and find itself able to quickly roll out down some nice new ducting (in the same way as any other provider), or alternatively, elect to sit on the sidelines and keep what it has now. It could also optionally offer parts of its network up to the project (again ducting only) in return for compensation and certain rights which would leave it as probably the biggest player, still, at the start of the new network. Same for Virgin Media.

      No compulsion at all. Just a big stick and a “put up, or shut up and sit on the sidelines – we’re doing this, do you want to be part of it” attitude from Government.

    • FibreFred

      Come on mark, no way is the state going to build new ducting across the whole of the UK next to the BT ducts, please keep it real 😉

    • New_Londoner

      Two comments on your post:

      1) As I said earlier, how will it be funded?

      2) Also as I said earlier, how will this pass state aid rules?

    • Gadget

      Openreach may be an internal division of BT, but it has quite an independant regulated existence http://stakeholders.ofcom.org.uk/telecoms/policy/bt-undertakings/

    • DTMark

      From what I can see looking through the EU State Aid approval document in detail, what we are doing does not pass State Aid guidelines in full, neither in spirit nor in actuality.

      Any project to improve broadband should naturally look to a futureproof solution which provides the best possible value for money. The current path provides neither by relying on an ancient phone network in part, and only one supplier.

      As regards who would fund it, my view is that apart from possibly a very few snall-scale exceptions no taxpayers money should be paid to private companies to provide services (“active” networks) however the State providing ducting and passive infrastructure is the correct path as the State acts correctly as facilitator.

    • New_Londoner

      Quote “…,however the State providing ducting and passive infrastructure is the correct path as the State acts correctly as facilitator…”

      You do of corse have to show that the proposed intervention is in an area of market failure, and that it will not distort other markets either.

    • DTMark

      If there were no market failure, why does BDUK exist?

  6. nicknick

    I was being ironic with my ‘little’ comment.

    At the time mmO2 was a quarter of the total worth of BT, and as O2 just before the takeover by Telefonica it was worth slightly more.

    However, if you are the monopoly provider of a service and you are using that monopoly to stifle competition you should expect the Govt to either tightly regulate you (obviously Ofcom is a dead loss in this regard) or for it to use it’s powers to force you to divest assets

    • FibreFred

      But they aren’t “the” monopoly of a service, Virgin cover over 50% of the country and what they cover are the most densely populated areas, so I’d say it would be hard to force them to divest assets in areas where VM are present?

    • nicknick

      Virgin CLAIM to cover 50% of the PEOPLE. This is picky I know but large swathes of the country (Area) are not covered. And their ‘real’ coverage is a lot less. C&W use BT copper for LLU and BT access tails for business.

    • FibreFred

      Still they have coverage and cover a lot of the population which is why I doubt Ofcom will interfere as there is another access supplier in the vast majority of the populated areas.

  7. Bob

    To have proper competion we first need to seperate Openreach from the main BT Group. This could be done by just making it a Wholly ownd BT subsidery in much the same way that DABS is a BT subsidery company

    Even with this the competition may need some prtection initily when you are compeying against an operator that has pretty near a 100% of the market outside of the cabled areas. REselling the BT product is not really competition

    We need at least One operator competing with BT at the wholesale level

  8. Bob

    There is little clarity of costs when Open reach is run as a business unit of BT. If it becomes a seperatecompaney wholly owned by BT the ball game changes, To all effect and purposes OPENREACH becomes a totally separate company with its own Board & P&L. BT can no longer cross charge. What BT can do at present is a bit like Starbucks do.

    If BT OPENREACH is a separate company cost become transparent. Everyone including BT retail becomes an external customer of OPENREACH. BT retail would have to lease the lines off of OPENREACH on the same terms as Sky, Talk Talk etc
    Companies will always be reluctant to invest where thee completion has pretty much a total monopoly. It has not been unknown for BT to suddenly decide an unviable area is viable once competition moves in.

    • FibreFred

      “BT retail would have to lease the lines off of OPENREACH on the same terms as Sky, Talk Talk etc”

      Happens now

    • Gadget

      Section 5 of the undertakings I referenced above requires separate accounts…

      “5.30 With effect from the start of BT’s financial year 2006/2007, the charging approach, management accounts and management information associated with AS shall be prepared on the following basis or as may be otherwise agreed by BT and Ofcom:”

      “5.31 With effect from the start of BT’s financial year 2006/2007, the regulatory financial statements of BT will also separately present the financial results of AS. The form, content and basis of preparation of the financial results of AS will follow those used in the preparation of the regulatory financial statements of BT except where differences are agreed with Ofcom and properly disclosed in the financial statements and related documentation. Information about the financial results of AS will include the following: headline revenue, cost of sales (or gross margin), SG&A, EBITDA, depreciation, operating profit and capital expenditure, revenues broken down into the broad product groups that the AS provides and further split between internal and external sales, separately identified payments to other parts of BT for products that form inputs to AS products (e.g. electronics); and a commentary that explains any changes in the basis within which the above figures are presented. BT’s regulatory financial statements will reconcile AS’s revenue and operating profit (and other such items as may be agreed between BT and Ofcom) with information about AS shown in BT Group plc’s annual report and accounts. The independent audit of BT’s financial statements will include AS.
      5.32 BT shall begin to report AS’s financial performance in BT Group plc’s annual and quarterly reports in the same format as is used for BT’s existing divisions from the start of BT’s financial year 2006/2007.”

    • Somerset

      And the decision about where to go will be done in conjunction with the ISPs like Sky and TalkTalk, without whom there would be no point.

  9. Bob

    Most companies will list out eacg group cpmanies accounts . It does not solve the problem thast costs can be manipulated such as how they charge out corporate costs etc. Having Openeach as a seperate company cuts out most of the scope for moving costs around

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