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September 21, 2015

BT broadband rivals band together to demand “radical reform”

Sky, TalkTalk and Vodafone UK make the case for a full market review by the CMA.

By Alexander Sword

Leading executives from some of the UK’s biggest telcos have banded together to demand fundamental reform of the UK’s broadband market.

The letter, published in the Financial Times and signed by the CEOs of Sky, TalkTalk and Vodafone UK, demands "radical reform" to tackle problems identified by Ofcom.

In particular, the signers claim that BT’s ownership of wholesale broadband provider Openreach lead to a "conflict of interest in the the role of BT, poor quality of customer service and difficulties in enforcing the existing regulatory regime."

This, they claim, leads to a "substandard experience for millions of customers and diminished opportunity for alternative providers to compete effectively."

They end by demanding that Ofcom refer the case to the Competition and Markets Authority to "undertake a full market investigation", allowing them to "address the structural barriers to competition that will unlock the next wave of investment in communications infrastructure that the country urgently needs."

The letter was also signed by major trade and industry bodies such as the Institute of Directors, Federation of Communication Services and the Independent Networks Cooperative Association.

Notably, the letter comes a day ahead of an event planned by BT at which the operator is expected to make announcements about broadband.

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BT responded to the letter by restating its arguments against splitting Openreach from BT, but acknowledged that there was "more to do" on customer service.

"BT has invested £10.5 billion of capital into Openreach over the past ten years and last year we invested more than ever before. This year, our investment in Openreach will be even higher.

"That has helped put the UK ahead of its European peers when it comes to superfast broadband coverage, speeds and prices – and we have outlined plans to go even further and faster.

"We acknowledge that there is more to do on customer service, but Openreach is exceeding all sixty of the service targets set by Ofcom and breaking up BT is not the answer.

"It would lead to huge uncertainty and fundamentally undermine the case for future investment, dragging the UK backwards at the very time it needs important investment in its infrastructure."

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