Ofcom and BT have finally agreed to a deal that will legally separate Openreach, the company connecting nearly all the homes and businesses in the UK.
A more independent Openreach away from BT is likely to mean better service and more competitive prices for customers.
What’s more, Ofcom will reportedly demand that the cost of third-party access to Openreach’s fibre network is lowered and that “substantial improvements” are made. According to The Sunday Times, if the company don’t install or fix lines for companies like TalkTalk or Sky on time, they will be hit with larger fines.
The communications regulator and BT have been trying to come to an agreement for two years, with Ofcom ordering the two companies to split in November last year.
Speaking on the new deal, Ofcom Chief Executive Sharon White said: “This is a significant day for phone and broadband users.”
She added: “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.”
Conservative MP Grant Shapps, who is also chair of the parliamentary cross-party British Infrastructure Group, was said broadband customers will benefit from the separation. He said: “There has been significant parliamentary concern about the current setup, which led to 120 MPs backing a report calling for separation.”
He added: “Now both BT and Openreach must focus on ensuring that the millions of UK customers receive better broadband.”
Almost a third of BT Group’s workforce, around 32,000 staff, will now be directly employed by Openreach. Ofcom say this will allow the company “to develop its own distinct organisational culture”. Openreach will also no longer use BT branding.
Both BT and all of its major rivals have said they are happy with the decision.