BT WILL SET OPENREACH loose upon an unsuspecting world to fend for itself, although it will still give it a yearly allowance, like a rich kid of Instagram.
The move comes after Ofcom had been bugging BT for years about the need to give Openreach more independence, warning that it could become emotionally stunted through the smothering love it was being showered with.
Friends of Openreach, like Sky and TalkTalk, also thought BT was being too controlling and had backed Ofcom's call for a separation of the unit from BT.
And so BT, after many teary conversations no doubt, has recognised the need to let Openreach do its own thing. However, it will remain part of the family and be given its annual operating budget.Openreach will have complete control over this budget, but it must consult with the likes of TalkTalk and Sky before undertaking any major infrastructure projects relating to the rollout of new broadband, either new fibre broadband services or upgrading copper assets.
Still, the firms involved are much happy with this setup, as before, when Openreach lived at home with BT, they worried projects would favour BT, rather than the wider market.
Some 32,000 staff from Openreach will move from BT to the independent Openreach and the firm will have its own logo without any BT branding.
Sharon White, Ofcom chief executive, said the deal was a significant moment for the UK telecoms sector and should led to improved services for all.
"The new Openreach will be built to serve all its customers equally, working truly independently and taking investment decisions on behalf of the whole industry - not just BT," she said.
"We welcome BT's decision to make these reforms, which means they can be implemented much more quickly. We will carefully monitor how the new Openreach performs, while continuing our work to improve the quality of service offered by all telecoms companies."
Gavin Patterson, BT Chief Executive, said the time was right to make the change as the firm recognised the UK would benefit from a more independent network infrastructure business.
"I believe this agreement will serve the long-term interests of millions of UK households, businesses and service providers that rely on our infrastructure. It will also end a period of uncertainty for our people and support further investment in the UK's digital infrastructure," he said.
"This has been a long and challenging review where we have been balancing a number of competing interests. We have listened to criticism of our business and as a result are willing to make fundamental changes to the way Openreach will work in the future."
One of the big hopes of an independent Openreach is that it will be able to put more money into improving customer services, as Alex Neill, Managing Director of Home Services at Which? noted.
"Millions of people have suffered woeful levels of service from Openreach, so these reforms must lead to significant improvements for customers who have been let down for too long," he said.
"Telecoms are now an essential part of our daily lives, so it's vital that consumers now really do see better phone and broadband services."
Kester Mann, principle analyst for operators at CCS Insight, said the deal was a real win for Ofcom under Sharon White's leadership and BT's rivals should be pleased with the outcome too.
"Its determination in negotiations with BT under the increasingly impressive stewardship of Sharon White, should be applauded," he said.
"BT's rivals, notably Sky and TalkTalk, will publically claim that the regulator should have gone further by enforcing a full structural separation.
"However, this option was always the most radical and controversial the regulator could have taken. In private they should be more than satisfied with the changes Ofcom has pushed through." µ
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