BT offers to open up its network
British Telecom offered today to open up its telecoms networks – but warned that regulatory uncertainty could put £10bn (€14.5bn) of investment at risk.
The telecoms giant pledged to offer rival operators lower wholesale prices, faster broadband services and transparent access to its local network.
The proposals were delivered to industry regulator Ofcom ahead of the deadline today for the second consultation phase of its strategic review of the telecoms industry.
BT had previously been threatened with the break-up of its wholesale and retail divisions, but learned in November that this was no longer in the thinking of Ofcom.
Chief executive Ben Verwaayen said the submissions represented an “absolute commitment” that BT will play its part in boosting competition within the telecoms sector.
The company was willing to create a division to ensure that all telecoms groups have equal access to the “local loop” – the copper wires that run between telephone exchanges and households.
Operations of the Access Services division would be overseen by a board containing two independent members chosen in consultation with Ofcom, even though it would remain part of BT.
The company also revealed plans to cut the wholesale prices of its most popular broadband product by about 8% from April in areas of high customer demand, high take-up and lower costs.
To meet the growing demand for greater bandwidth, BT said it would begin trials in April with a view to launching higher speed services nationally from the autumn.
In its submission, BT said it needed regulatory certainty so that all telecoms companies could “invest and innovate” with confidence”.
Up to £10bn (€14.5bn) has been earmarked as investment in the creation of a state-of-the-art network over the next five years, which BT said was higher than any its European rivals.
But the company warned: “These plans, which would bring substantial benefits to the UK, are dependent upon BT receiving assurances it can generate appropriate economic returns from its investment.”
Ofcom expects more than 100 telecoms firms, consumer groups and other interested parties to make submissions during this consultation phase.
It will spend the next few weeks reviewing the proposals and will make a statement on the future regulatory approach in the spring.
A BT spokesman stressed that its proposals represented an entire blueprint that was conditional on support from Ofcom and would not be implemented in parts.
Francesco Caio, chief executive of Cable & Wireless, said a new regulatory settlement must include tough sanctions to ensure that BT delivers equal access to its network.
He said: “Without continued robust direction from Ofcom now and in the future, BT will continue to be able to inhibit choice and prolong the unsustainable structure of the fixed telecoms industry from which only they benefit.”
Among its proposals, C&W urged the creation of a separately audited unit within BT covering its monopoly business.
