BT avoids break-up in case that will be watched here
Published 27/07/2016 | 02:30
BT will not be forcibly broken up by the UK telecoms regulator but will form a "legally separate" entity to manage broadband access for rival firms.
In a ruling, UK telecoms regulator Ofcom said that the British incumbent telecom operator will keep ownership of its broadband network as long as it opens up further to rivals and invests more in upgrades.
"Openreach should be a legally separate company within BT Group with its own articles of association," said the British regulator.
"It should have its own board with a majority of non-executive directors, including the chair. These non-executives should not be affiliated to BT Group in any way, but would be both appointed and removed by BT in consultation with Ofcom."
In a statement, BT accepted the creation of the new separate board. "We have listened to Ofcom and industry and are introducing significant changes to meet their concerns," said Gavin Patterson, BT Group chief executive.
The UK move comes after the operator's Irish chief called for "functional" separation of Eir's units to ensure greater compliance with regulatory standards for broadband access in Ireland.
"It has to take place," said Shay Walsh, managing director of the Irish BT operation, in a recent interview with the Irish Independent.
"At present, there's no functional separation. There's no separate door for retail and wholesale.
"Until you have a verifiable separation of the wholesale systems from the retail systems, then it's hard to see how much progress they're making."
Irish telecoms regulator Comreg is currently preparing a major review of Ireland's telecoms rules.
A number of internal Eir reports have highlighted shortcomings in the company's relations with rival firms which sell services using Eir's incumbent copper network.
However, Eir is set to resist any moves to further separate its wholesale and retail divisions.
"A review of our wholesale governance model is underway by Comreg and we are fully engaged in that process," said a spokesman for Eir.