Britain's BT Group today unveiled a new independent business unit it was forced to set up as part of a deal with the regulator to foster greater competition in the UK's telecoms sector.
The new unit, called 'openreach' will take control of the former monopoly's local network linking homes and businesses in the UK to its telephone exchanges, and cut off BT's stranglehold at the local exchange level.
BT's rivals depend on this network, also called the local loop, for their services, and have long complained that the UK's top fixed-line operator's control over this vital and hard-to-duplicate asset had stifled competition.
BT said openreach, set to be operational from January 2006, would have assets of around £8 billion sterling and revenues of over £4 billion, making the unit bigger than FTSE 100 companies such as BSkyB, Alliance & Leicester and Scottish & Newcastle.
Openreach, BT's fourth unit alongside its Retail, Wholesale and Global Services arms, will have a separate headquarters, a distinct identity and around 30,000 staff, most of them engineers drawn from its retail and wholesale units. The division, although part of BT, will be run by a separate chief executive, and will have its performance and independence monitored by a newly-created Equality of Access board.
BT's move is part of a deal reached with telecoms and media regulator Ofcom, whose year-long review of the telecoms sector had threatened to break up the company.
Ofcom said BT's moves would lead to lower prices and greater choice for consumers, adding the company had agreed to substantial structural, product and governance changes.
Openreach, although part of BT, will be run by a separate chief executive, and will have its performance and independence monitored by a newly-created Equality of Access board.
