BT’s control over the country’s telecoms infrastructure could be called into question in the coming weeks, following news that industry regulator Ofcom is launching a full review of the UK’s communications market.
The review has been dubbed a “once-in-a-decade” move that will see Ofcom decide whether the country’s infrastructure has kept up with huge changes to the industry, recently exacerbated by a series of takeovers and moves by some telecoms companies into the TV arena.
Sky and TalkTalk are believed to have called for BT’s Openreach division – which maintains the country’s infrastructure – to be split from the company and made into an independent entity. Of course, the request is likely to be fought tooth and nail by BT, who sees it as an important revenue stream.
Openreach nets BT £1.5bn a year, money which is being spent on acquiring things like EE and European and Premier League football with which to challenge Sky’s superiority. Sky apparently believes that allowing BT to operate in this way effectively stymies fair competition.
Jeremy Darroch, Chief Executive of Sky, said “Ofcom must now take the opportunity to address Openreach’s conflict of interest as a subsidiary of BT or risk extending the problems that are affecting the industry and its customers today.”
BT’s proposed acquisition of EE has also been cited as a cause for concern. Market analysts Macquarie claim that, should the takeover go through, it would leave BT with almost a third of the entire UK telecoms market and over 70 per cent of its wholesale market.
Ofcom’s last review of this sort took place back in 2005 and resulted in the formation of BT Openreach. It’s hoped that this time around the regulator will take a serious look at BT’s place and make the necessary changes to ensure that it doesn’t hold an unfair advantage, which could ultimately harm consumers and the industry alike.