BT share price dips as Ofcom considers spinning-off Openreach

 
Emma Haslett
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Scary prospect? Ofcom said splitting up BT could help rivals (Source: BT)

It's been months in the offing and the cause of various, vociferous complaints - but now communications watchdog Ofcom has finally come out with it: it's considering breaking up BT.

In an outline of a review this morning the regulator said separating BT from its Openreach network "could deliver competition or wider benefits for end users".

"It would remove BT's underlying incentive to discriminate against competitors. Separation could also offer ways to simplify existing regulation," it said.

Read more: Ofcom review: What happens next?

But it also acknowledged wrenching Openreach away from the company could be more trouble than it's worth.

"The process would be challenging and it may not address some concerns relating to Openreach - such as service quality, or the timing and level of investment decisions."

The review marks Ofcom's decision to wade into a war between telecoms providers, after rival Sky complained that Openreach delivered "low quality service", and saying that BT does not invest enough in the service, which delivers the so-called "final mile" of broadband cabling into homes. Virgin Media and TalkTalk have also both previously complained about BT's position in the market.

Ofcom chief executive Sharon White said the regulator's priorities were "clear".

“We want to promote competition, investment and innovation, so that everyone benefits from even better coverage, choice, price and quality of service in years to come.”

The news caused BT shares to dip 0.5 per cent as the market opened, to 467p.

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