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LONDON (Alliance News) - UK media and communications regulator Ofcom on Thursday said it has completed the first phase of its Strategic Review of Digital Communications and said it will seek views on a number of potential changes, including on the possible break-up of BT Group PLC.
Ofcom outlined a range of potential options to improve competition in the communications market and will seek views and evidence on a series of future regulatory approaches as regards BT.
These would include retaining the current model, where BT's Openreach infrastructure business is required to provide access to the network to competing providers, or strengthening the current regulatory model, which would impose new rules on BT, including controls on its wholesale charges with stronger incentives to improve quality of services and tougher penalties should it fail to meet targets.
The option also includes separating the Openreach business from BT, something rival Sky PLC recently called for. Ofcom said this could deliver competition and wider benefits for consumers and would "remove BT's underlying incentive to discriminate against competitors". It added, however, that the "process would be challenging and it may not address some concerns relating to Openreach".
The other option tabled by Ofcom would be deregulating the market and promoting competition between networks, though the regulator said this could lead to a "duplication of networks and weak competition".
Sky Chief Strategy Officer Mai Fyfield said it was "welcome news that Ofcom is putting the future of Openreach at the centre of its review".
"For too long, consumers and businesses have been suffering because the existing structure does not deliver the innovation, competition and quality of service that they need," Fyfield added.
BT shares were down 0.2% to 468.45 pence in early trade on Thursday, while Sky shares were up 0.6% to 1,131.65p.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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