BT ordered to legally separate from Openreach but hopeful of reaching a 'voluntary' deal Divorce: BT has been ordered by the UK's telecoms regulator to formally separate its Openreach broadband unit, amid concerns over competition issues While stopping short of forcing BT to sell the business, Ofcom said it will regularly monitor Openreach and could force a sell off in future if it does not believe the firm is being run as a distinct company.
BT has faced mounting calls for a full split of Openreach, with the division having been being criticised for poor customer service and a lack of investment. BT's rivals, including TalkTalk and Sky, have been lobbying Ofcom for BT to be forced to sell off Openreach. The two firm's pay to use where to buy pandora charms online the Openreach network for their own broadband services and have previously complained about the firm's poor service and urged the where sells pandora bracelets group to replace its ageing network of copper wire. Ofcom said: 'We are disappointed that BT has not yet come forward with proposals that meet our competition concerns. 'Some progress has been made, but this has not pandora stores nz been enough, and action is required now to deliver better outcomes for phone and broadband users.' A BT spokesperson told This is Money: 'We put forward proposals in July that we believe are fair and sustainable, and that meet Ofcom's objectives without disproportionate costs. 'We are implementing these proposals, and have just appointed Mike McTighe to be the first chairman of Openreach. 'We are in discussions with Ofcom on two outstanding issues, the reporting line of the Openreach CEO and the form of legal incorporation. 'We will continue to work with Ofcom to reach a voluntary settlement that is good for customers, shareholders, employees, pensioners and investment in the UK's digital future.' Stopped short:Stopped short: BT's rivals, including TalkTalk and Sky, wanted BT to be forced to sell Openreach off A spokesperson for Sky said: 'Let's not forget why we are here BT Openreach has continued to fail consumers. 'This is why we have always said that we want a solution that is clear and executable and in the best interests of consumers and industry. We will now watch closely as to how Ofcom executes its proposals.' On Monday, BT appointed its first independent chairman for Openreach, Mike McTighe, who was himself on the board of Ofcom between 2007 and 2015. But, Ofcom has said it wants Openreach to have a board made up of a majority of directors who are independent of BT. Governance:The telecoms regulator is concerned that under BT's plans, the boss of Openreach will still report to its boss Gavin Patterson The regulator is concerned that under BT's plans, the boss of Openreach will still report to the telecom giant's boss Gavin Patterson. The regulator wants Openreach management instead to report to the chairman of its own board. It also wants Openreach to have greater consultation with customers on large scale investments, its own staff working, ownership of assets that it already controls, its own strategy and control over budget allocation, as well as independent branding. 'It would appear Ofcom is still open to BT proposing a better voluntary deal. 'Ofcom isn't changing its position at all. The regulator is still gunning for legal separation rather than full structural separation and is using a potential notification to Brussels in an attempt to ensure it can get this over the line.' He added: 'Those calling for structural separation including Sky and TalkTalk will be disappointed this option still isn't being considered more closely. 'But this is one step closer towards finding a version of Openreach that maximises investment in new digital infrastructure while still allowing effective competition. Many agree that is what's needed, but disagree on how to do it. Ofcom is clearly seeking to strike a balance.' In reaction to the news, BT shares on the FTSE 100 index edged 0.3 per cent, or 0.95p higher to 351.25p this morning. Meanwhile, Talk Talk shares jumped 4.7 per cent, or 7.3p higher to 164.4p, while Sky's shares added 7p to 776p. 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