British Telecom forms new unit to provide fair access to rivals

09/22/05 - newratings.com

LONDON, September 22 (newratings.com) – British Telecom (BT-GBX) Thursday unveiled a new independent division aimed at giving the company’s rivals equal access to its network. The new division was formed as part of a settlement reached with the UK regulatory authorities in June this year.

British Telecom had agreed to set up a separate company to encourage free competition in the UK telecom segment, as per a settlement reached with the country’s telecom regulator, Ofcom. The new division, to be called "Openreach," will take control of British Telecom’s local network linking homes and businesses in the UK to the company’s telephone exchanges. British Telecom’s rivals also use this network and have often complained regarding the company’s control over the concerned infrastructure.

According to Reuters, Openreach, expected to become operational by January 2006, will have assets worth £8 billion. The division will have a distinct identity with separate headquarters. Ofcom said that the establishment of Openreach is expected to result in reduced prices and greater choice for customers. Openreach’ chief executive, Steve Robertson, said that the new unit will ensure that the way providers buy and receive network services is done in a completely equal and fair way.