BT is the largest provider of broadband and telephone connections in the UK, but it’s also the company that runs that infrastructure through its Openreach subsidiary. It could lose that control if it doesn’t invest more in high-speed broadband connections MPs have suggested, having reviewed the company’s current structure.
The Culture, Media and Sport Committee have been investigating BT and whether or not its ownership of Openreach gave it an unfair advantage over its competitors. Sky and Virgin Media have both called for the two companies to split, with Ofcom previously warning that a split was likely if it didn’t get its house in order.
In the report published by the Culture, Media and Sport Committee, the group of MPs suggested that BT should be spending “hundreds of millions of pounds a year” rather than the current expenditure.
This echoes Ofcom’s warning in February, which suggested that BT should be more open to sharing access to its telegraph poles and underground ducts, as well as giving its broadband division an increased influence over investment, speed up line repairs and improve the wait time for new installations.
BT had been expecting the Culture, Media and Sport Committee to criticise is approach to Openreach, with the company having prepared a press release praising its ‘strong progress’ over the last couple of years. The company says that it has improved customer service and has cut down the average appointment time. In fact, BT now says that it fixes 84% of faults within two working days, up from 67% in 2014, and the average appointment time is now just seven days, down from 11.
Ofcom is set to pile on the pressure later this year, with the organisation planning to publish its review of BT and Openreach later this year. Ofcom performs the review every 10 years, but it’s expected that this year will be an especially difficult year for BT, with Ofcom expected to clamp down on any neglect BT gives in terms of investment.
BT says that its moves should not be criticised and that it has invested more than £1 billion a year in infrastructure, despite the country emerging from recessing and amid lower investment from rival companies. Despite that, BT says that it is working with Ofcom to increase the autonomy of Openreach without separating the two companies, warning that a complete division would lead to less investment and not more.