TalkTalk share price jumps on news BT and Openreach will be split

 
Caitlin Morrison
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TalkTalk boss Dido Harding will be pleased with today's BT news (Source: Getty)

Shares in telecom group TalkTalk have jumped this morning on the news that rival BT is to be separated from its broadband infrastructure arm, Openreach.

TalkTalk's stock was up four per cent by mid-morning.

Ofcom said earlier that it would go the European Commission seeking to legally split BT and Openreach.

"Creating a more independent Openreach – which works in the interest of all providers, not just BT – is an important part of achieving this," the watchdog said.

"We are disappointed that BT has not yet come forward with proposals that meet our competition concerns. Some progress has been made, but this has not been enough, and action is required now to deliver better outcomes for phone and broadband users."

Dido Harding

TalkTalk chief executive Dido Harding has long been calling for the regulator to take action over Openreach.

Today, she welcomed the news as being a "step in the right direction", but added: "I don’t think they’re going far enough. Consumers and businesses across the country are fed up because their broadband doesn’t work properly."

BT and Ofcom have not provided enough detail about the next steps to give any indication of how TalkTalk will be affected on a practical level, Harding told City A.M. BT and Ofcom are still in discussions over how the new independent Openreach structure will work - BT wants the Openreach board to report to its group board, while Ofcom has yet to be convinced.

Time for action

"In one sense all they have announced is that they intend to do something," she said. "It’s not going to change anything straight away."

Harding acknowledged that Ofcom's announcement would put pressure on Openreach and BT, but added:

These are just words. Consumers and businesses will only be happy when we have got some action.

TalkTalk will continue with its "Fix Britain's Internet" campaign, Harding said, until Openreach is a truly independent business: "Independence is best delivered by an independent organisation rather than a legally separate business."

Failing customers

Sky's share price inched up by 0.7 per cent this morning. A Sky spokesperson said: "Let's not forget why we are here - BT Openreach has continued to fail consumers. This is why we have always said that we want a solution that is clear and executable and in the best interests of consumers and industry. We will now watch closely as to how Ofcom executes its proposals."

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