Ofcom has ruled that BT's Openreach division, which runs the UK's broadband infrastructure, must become a legally distinct company within the BT group. The regulator stopped short of demanding a full break-up, citing practical obstacles such as BT's pension scheme and land deals.
Ofcom chief Sharon White said the changes would ensure more independence for Openreach without the costs and delays of a full split. She told the BBC the plans could be introduced within months and would deliver faster, more reliable broadband. Openreach will have its own board, branding, and control over its budget.
BT chief executive Gavin Patterson called the decision a 'sensible way forward' and acknowledged broadband services could be 'better'. He said 95% of the UK would have high-speed internet by the end of 2017, with a goal to cover the remaining 5% by 2020.
Consumer group Which? welcomed the move but said customers would expect 'big improvements' in Openreach's 'woeful' service. TalkTalk chief executive Dido Harding criticised the plan, warning that legal separation still leaves Openreach's budget under BT's control and that BT has 'proven itself expert at gaming the system'. BT strongly rejected that claim.
Investors reacted positively, sending BT shares up 3% in early trading. The government said a full split 'remains an option', while Ofcom will consult on its plans until 4 October.
