Could some lucky company grab a slice of the OpenReach pie? That’s a possibility that’s creating a lot of buzz in the technology landscape right now. According to a recent statement from the Boss of BT’s networking branch, Openreach, there may be a possibility to sell a minority stake in the business. However, Openreach is only willing to consider this if they find the right investor.
If Openreach was to sell a minority stake of it’s business, then they would want the investor to support the action of rolling our fibre internet throughout the UK. The Chief Executive of Openreach, Clive Selley, has already admitted that his division was a “significant drag” on spending. His comments will now fuel a lot of speculation that BT might strike a deal next year, particularly after the group’s CEO, Philip Jansen, announced that he was “open-minded” about the concept.
The Market is Already Speculating
According to Clive Selley, what he wants from BT right now is significant backing on his big fibre deployment strategy, as he believes that it’s the future of the business. To date, BT has given Clive the backing he needs, and they’ve committed to investment in the future, but they’ve also noted that Openreach is a drag on BT’s investments.
Clive noted that he currently spends more than half of the capital expenditure for the BT group, and he’s only one-quarter of the full business. However, he has been reassured by the Chairman of BT, Jan Du Plessis, and the CEO, Philip Jansen, that Openreach is a core business in BT, and something they’d want to maintain majority control over. What Clive is focusing on most now, is whether the owner of the minority share would back the Openreach transformation strategy.
Selley said that whether he approved of a minority owner or not would depend on whether that owner can back the fibre roll-out strategy. He currently disagrees with the perception that most homes still won’t have fibre broadband by 2025 and says that BT could deliver this by 2026 if they had the right support.
What’s Next for Openreach?
At this point, it’s difficult to tell whether BT will actually sell a minority stake or not. Reports from this year and 2020 suggest that BT was looking for ways to raise some cash from the business, which is currently valued at about £20 billion alone and delivers network services to companies like TalkTalk and Sky.
Jansen notes that the decision to sell a small amount of the company would depend on the regulatory decisions that occur within the new year.
