According to the chairman of Openreach (BT’s network division), the telecoms company has so far underinvested in broadband for the masses over a period of several years. Comments regarding this underperformance were issued in a statement that’s bound to fuel anger over delayed repair times and slow internet speeds throughout the UK.
Mike McTighe seemed to suddenly ignore the line that BT has been using in its messaging surrounding how much the company spends on maintenance and upgrades, to instead admit that he believes the company should have been investing more money into its network.
A Surprising Announcement
McTighe, a veteran for the telecoms industry, was appointed as the first chairman of OpenReach during November of 2016, under reformations to the unit made by BT. He commented that he would be seeking to invest more into the foundation of the connection industry, so that Britain can enjoy faster, more reliable speeds. Though we all expected to hear such promises from the new OpenReach chairman, we didn’t expect to hear the part that came next, where McTighe noted that BT should have made these investments years ago.
This admission is likely to create some noise in the industry, and add to the speculation that BT will now be unveiling an increase in their network spending, and the number of homes to be fitted with a full fibre-optic connection. These links can deliver ultra-fast, more reliable connectivity that knocks the old copper telephone lines out of the water. At present, BT currently plans to install around two million fibre lines, alongside a range of cheaper technology upgrades for around 10 million homes, designed to generate higher speeds from copper lines.
The BT Separation in Full Swing
For some, Mr. McTighe’s comments will act as further proof to show that Openreach are finally becoming an independent unit – completely removed from BT, who up until now have stood against allegations from rivals that they had not provided enough funds to Openreach. The division is the biggest profit generator for BT, and is due to get a share of a £6 billion network investment that was announced in 2016.
The BT spending plans have been criticised, however, as information emerged which showed that they included no intention to increase capital expenditure for Openreach, which currently provides the network connections for over 20 million TalkTalk, Sky, and BT customers. McTighe announced his opinion on the ongoing debate when appointing two independent non-executive directors into the latest separate Openreach board – including the former boss of the union, Sir Brendan Barber, and an ex-director of National Grid, Edward Estelle. Additionally, Clive Selley, the chief executive for the network unit, will also be reporting to Mr McTighe, rather than Gavin Patterson.
Plans for the Future
Mike McTighe noted that he was in negotiations with Sir Mike Rake – the chairman for BT, on the specifics surrounding their plans for the future. However, he indicated that there was some likelihood that major plans for investment would emerge.
Openreach additionally announced that its new remuneration, audit, and nomination committees would be constructed entirely of independent directors. However, the governance plans didn’t satisfy Ofcom, which said that it would fall short of their requirements for a legally removed Openreach that delivers equal levels of service for all its customers. The regulation body plans to apply to the European Commission to impose new reforms to BT this year. For now, the problems seem to surround the distribution of staff and assets. While Ofcom wants Openreach to be in charge of its own affairs from a legal perspective, BT wants to maintain control, claiming that problems may otherwise emerge for its £47 billion pension scheme.
