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Ofcom: Openreach does not have to split from BT

BT will not be forced by the telecoms regulator to sell off the Openreach network division of the company.

Speaking this morning on Radio 4 on the outcome of its year-long investigation, Ofcom chief exec Sharon White outlined plans to make Openreach into a distinct company, with its own board.

White said it would also be required to consult on investment plans with its customers, technically also its competitors, including the likes of TalkTalk and Sky, without details getting back to BT.

She called this the “biggest shake up” in Openreach’s 10-year history but stopped short of forcing BT to sell this arm of its company.

That’s despite wide industry calls for a separation and a damning report from MPs that said BT had sacrificed customer and shareholder value by favouring BT’s wider agenda.

White also made clear that this proposed change would only take a matter of months, where separating the two entirely, including carving up a £10 billion pension deficit, would stall investment.

The plan goes further than that suggested by Mike Rike, chairman of BT Group, yesterday.

He offered some compromise in the shape of an independent board and greater spending power for Openreach around its investments.

White said BT had not yet agreed to this change and that Ofcom also promised to keep its decision under review.

All of the proposed changes have now been fully outlined, with yet additional work for Ofcom to do over the coming months to ensure the idea is sound.

Ofcom is now asking for submissions on the consultation document, which can be submitted until 4 October.