{"id":16829,"date":"2018-08-21T08:34:29","date_gmt":"2018-08-21T07:34:29","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=16829"},"modified":"2018-08-21T08:42:47","modified_gmt":"2018-08-21T07:42:47","slug":"some-key-bt-shareholders-still-pushing-for-openreach-split","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2018\/08\/some-key-bt-shareholders-still-pushing-for-openreach-split.html","title":{"rendered":"Some Key BT Shareholders Start Pushing for Openreach Split"},"content":{"rendered":"<p>A new report has claimed that some of <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/britishtelecom\" rel=\"nofollow\" target=\"_blank\">BT<\/a>&#8217;s &#8220;<em>biggest shareholders<\/em>&#8221; will urge any future CEO of the telecoms and broadband ISP giant to put serious consideration toward the old idea of splitting out their UK network access division, <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/openreach\" target=\"_blank\">Openreach<\/a>, in the hope of boosting the company&#8217;s share price.<!--more--><\/p>\n<p>At present <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/openreach\" target=\"_blank\">Openreach<\/a> has only recently become a &#8220;<em>legally separate<\/em>&#8221; company from the <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/britishtelecom\" rel=\"nofollow\" target=\"_blank\">BT<\/a> Group and that followed the outcome of <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/ofcom\" target=\"_blank\">Ofcom<\/a>&#8217;s 2016 Strategic Review (<strong><a href=\"http:\/\/www.ispreview.co.uk\/index.php\/2016\/02\/ofcom-confirm-no-openreach-split-bt-big-change-coming.html\">full summary<\/a><\/strong>), which found that the network operator still had an &#8220;<em>incentive to make decisions in the interests of <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/britishtelecom\" rel=\"nofollow\" target=\"_blank\">BT<\/a>, rather than BT\u2019s competitors, which can lead to competition problems<\/em>&#8220;.<\/p>\n<p>Back then the regulator also noted that the BT had failed to &#8220;<em>sufficiently<\/em>&#8221; consult rival ISPs, such as those that piggyback off their network, on future &#8220;<em>investment plans that affect them<\/em>.&#8221; They were also deemed to have under-invested in their network to the tune of &#8220;<em>hundreds of millions of pounds<\/em>.&#8221;<\/p>\n<p>In response BT and <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/ofcom\" target=\"_blank\">Ofcom<\/a> last year reached a voluntary agreement (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2017\/03\/ofcom-bt-reach-voluntary-agreement-openreachs-uk-future.html\">here<\/a>). This aimed to boost competition by giving rivals easier access to the operator\u2019s infrastructure and fostering an independent governance structure for <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/openreach\" target=\"_blank\">Openreach<\/a>, as well as tougher minimum service quality standards, separate branding, new consumer protection measures and better information sharing etc.<\/p>\n<p>On top of that Openreach has also committed to deploy Gigabit capable &#8220;<em>full fibre<\/em>&#8221; (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/fttp\">FTTP<\/a>) broadband services to 3 million premises by the end of 2020. After last week&#8217;s <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/gfast\">G.fast<\/a> reduction it now also seems almost inevitable that they will then aim to deliver 10 million <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/fttp\">FTTP<\/a> premises by around 2025 (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2018\/08\/openreach-to-scale-back-rollout-of-g-fast-broadband-focus-on-fttp.html\">here<\/a>). A significant deployment, the biggest by far of any UK operator.<\/p>\n<blockquote class=\"bq1\"><p><strong>A BT Spokesperson said:<\/strong><\/p>\n<p>&#8220;Openreach is an important part of BT and there are no active plans to sell the business.&#8221;<\/p><\/blockquote>\n<p><a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/ofcom\" target=\"_blank\">Ofcom<\/a> typically doesn&#8217;t conduct major strategic reviews very often (usually once a decade) and as such the regulator seems unlikely to touch on the idea of a full split again for another 8 years or so, assuming they do so at all. Nevertheless a new report in the <a href=\"https:\/\/www.ft.com\/content\/4add3480-a22d-11e8-85da-eeb7a9ce36e4\" target=\"_blank\" rel=\"noopener\">FT<\/a> (paywall) notes that some of BT Group&#8217;s largest shareholders may push the company&#8217;s future CEO to reconsider the option of full structural separation from Openreach.<\/p>\n<p>The next CEO is likely to conduct a review of the business structure but that seems unlikely to conclude that a complete break-up is the way to go (stability is currently very important). BT&#8217;s Chairman, <strong>Jan du Plessis<\/strong>, has already made it clear that he would &#8220;<em>not endorse<\/em>&#8221; a strategy that delivered only a short-term gain at the cost of the long-term picture. &#8220;<em>Inevitably that is how you make mistakes<\/em>,&#8221; said Jan.<\/p>\n<p>Meanwhile many of BT&#8217;s rivals would still like to see Openreach being structurally separated from BT, although that is often more about weakening a competitor and strengthening their own position than fostering true pro-consumer change. Most of the same rivals are also primarily focused on improving urban connectivity, with precious few harbouring a serious plan to boost connectivity for expensive harder to reach locations.<\/p>\n<p>As it stands we believe that the majority of BT&#8217;s shareholders wouldn&#8217;t support such a split. The fact that BT&#8217;s share price has hardly budged since the FT ran its story perhaps lends some limited support to this viewpoint.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A new report has claimed that some of BT&#8217;s &#8220;biggest shareholders&#8221; will urge any future CEO of the telecoms and broadband ISP giant to put serious consideration toward the old idea of splitting out their UK network access division, Openreach, in the hope of boosting the company&#8217;s share price.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1],"tags":[474,472,69],"class_list":["post-16829","post","type-post","status-publish","format-standard","hentry","category-uk_isp_news","tag-bt","tag-business","tag-bt-openreach"],"share_on_mastodon":{"url":"","error":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.3 - 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