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LONDON (Alliance News) - A group of more than 100 Members of Parliament, spearheaded by former Conservative Party co-chairman Grant Shapps, backed calls for BT Group PLC's Openreach division to be separated.
The group, calling themselves 'The British Infrastructure Group', called on UK telecoms regulatory Ofcom to take "radical action" over the "natural monopoly" of BT Openreach.
Ofcom has tabled the potential separation of Openreach - which is responsible for the installation and upkeep of most of the UK's broadband connections - as part of its ongoing wider review of digital communications. The British Infrastructure Group's report adds to the voices of many of BT's rivals, including Sky PLC, who have clamoured for the division to be separated.
The British Infrastructure Group's report, dubbed 'Broadbad', argues that Openreach has failed to deliver on efforts to connect harder-to-reach areas of the UK with high-speed broadband services, and alleges that around 5.7 million in the UK have connections that do not reach Ofcom's minimum limit of 10 megabits per second, amongst other claims.
"The time has come for BT to be forced to sell off Openreach to encourage more competition and a better service for every internet user and for the benefit of the UK economy," the report said.
The report claims that Openreach generated GBP0.50 in earnings before interest, tax, depreciation and amortisation for every GBP1 of revenue, and notes that no other telecoms companies, such as Virgin Media or Sky, receive "such generous subsidies".
"We take any criticism seriously but we think this report and its recommendations are misleading and ill-judged," said a spokesperson for BT in a statement.
"Independent data from Ofcom, the EU and others repeatedly place the UK number one for broadband and superfast broadband when compared to other large EU countries. 90 percent of UK premises can already access a fibre optic broadband connection. That will soon climb to 95% and above," the spokesperson said.
"We understand the impatience for progress to be even faster, but improving broadband is a major engineering project that involves contending with all manner of physical and geographic challenges. The idea that there would be more broadband investment if BT's Openreach infrastructure division became independent is wrong-headed. As a smaller, weaker, standalone company, it would struggle to invest as much as it does currently," the BT spokesperson added.
Ofcom is due to publish initial findings of its review in early 2016.
Shares in BT Group were down 1.4% at 480.40 pence Monday morning.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
Copyright 2016 Alliance News Limited. All Rights Reserved.
