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BT takes baby steps towards Openreach independence

BT is pressing ahead with plans to reform Openreach by appointing two members to a newly created independent board that will oversee strategy, investment and service delivery at the access infrastructure division.

These measures won’t be enough to appease the regulator, however; Ofcom has already said that the changes fall short of its requirements for a legally separate Openreach (see Ofcom orders legal separation of Openreach from BT).

In its Digital Communications Review a year ago, Ofcom stopped short of demanding a full break-up of BT, but didn’t rule it out completely (BT avoids breakup following Ofcom digital review).

The two new members of Openreach’s independent board are Sir Brendan Barber and Edward Astle. Barber is former General Secretary of the Trades Union Congress and current chair of the Advisory, Conciliation and Arbitration Service (ACAS). Astle has a distinguished history in the telecoms and utilities sectors, as executive director of global business at Cable and Wireless from 1989 to 1997 and then as a board member of National Grid.

They join Mike McTighe, who was appointed independent Chairman of Openreach in December 2016.

Mike McTighe, chairman of Openreach, took a conciliatory tone in the press release: “Openreach’s network and connectivity underpins Britain’s digital economy and we know that our customers have very high expectations of us. I understand that customers sometimes feel let down by Openreach because we haven’t always delivered the service they expect or that we hope to provide.”

He added: “We have made a lot of progress since Clive Selley joined as CEO a year ago – for example on halving the number of missed appointments, making our fibre network available to millions more people and accelerating our plan to introduce a new generation of ultrafast technology. But we need to do more to re-build trust and credibility. This will be the Board’s focus.”

The board will be responsible for setting Openreach’s strategy and overseeing its performance, making sure it treats all customers equally whilst investing in better service, broader coverage and faster broadband speeds for the entire UK.

The Openreach board also includes Clive Selley, Openreach chief executive; Clare Sadlier, Openreach chief finance officer; and Simon Lowth, BT Group finance director. A fourth independent non-executive with a specific focus on customer service is due to be announced soon.

As the largest provider of fixed network infrastructure in the UK, Openreach is a highly regulated business, with more than 90 per cent of its revenues generated from services that are regulated by Ofcom. The new board members bring important experience in working in regulated industries, as well as a wealth of experience in in employment relations, the operator said.

Openreach is a wholly owned division of the BT Group. For the year ended 31 March 2016, it reported revenues of £5.1 billion.

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