Procurement · 10 March 2017

Small business owners eye faster broadband as Openreach splits from BT

BT Openreach split
The BT Openreach split could provide savings for small business owners

BT has finally reached an agreement with Ofcom that sees it split from its Openreach service provider, ending two years of legal wrangling with the communications regulator.

Ofcom pursued the separation of BT from Openreach to remove the conflict of interest that saw customers of other providers using BT’s fibre network suffer from poorer broadband services.

Small business owners using providers such as Sky, Vodafone and TalkTalk – operators using the Openreach network – have previously suffered from BT prioritising its own customers, while rivals have complained of underinvestment in networks.

Under the agreement, Openreach will operate as a separate company with its own management and staff. The provider’s branding will not feature the BT logo, but BT will still have control over Openreach’s overall budget.

The split stops at a full structural separation, with Ofcom chief executive Sharon White satisfied the legal split will deliver better service for all customers.

In a statement, BT chief executive Gavin Patterson said that the ruling would end the uncertainty surrounding the UK’s broadband infrastructure that sees many small business owners suffer from insufficient connectivity.

Patterson added: “I believe this agreement will serve the long-term interests of millions of UK households, businesses and service providers.”

BT has also pledged its commitment to the government’s universal service obligations to give every business the necessary speeds to remain competitive.

Commenting on the announcement, Dan Howdle, director of communications at Cable.co.uk, said that customers of all providers could now expect the same levels of service.

He added that customers would also benefit from greater choice and potential savings from the legal split.

“This is a good day for the average broadband, TV and phone customer, who will enjoy all the benefits the stoking of competition in a fairer marketplace is likely to bring, without suffering the costs and delays to infrastructural rollout a full separation would have incurred,” Howdle said.

In November 2016, BT performed a nationwide upgrade to its fibre network, doubling to broadband speeds of 46,000 businesses. Under the new arrangements, business owners can seek out the most suitable deal for their company, knowing they won’t be punished for shopping around.

In his recent Budget announcements, chancellor Philip Hammond confirmed £200m of investment in 2017 into providing full-fibre broadband access for small firms across the UK.

The money will fund network improvements and vouchers to support small business owners who struggle with slow connections, a significant issue in rural regions where broadband provision was recently deemed “unacceptable” by small business advisor Informi.

Spring Budget 2017: New funding for businesses to access full-fibre broadband

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ABOUT THE EXPERT

Simon Caldwell is a reporter for Business Advice. He has a BA in politics and communications from the University of Liverpool, and previously worked as a content editor in the ecommerce industry.

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