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September 22, 2015

BT CEO promises to make UK ultrafast, launches Openreach PR offensive

Gavin Patterson launches new commitments to improving service and coverage.

By Alexander Sword

BT has made four pledges on UK broadband in its biggest PR offensive yet in the battle over the future of Openreach.

Speaking at the Delivering Britain’s Digital Future conference in London, CEO Gavin Patterson announced the new goals including a universal minimum speed of between 5 and 10 Mbps, to extend fibre broadband and ultrafast to more premises and improve service.

While the government currently aims to provide fibre to 95 percent of premises, Patterson claimed that BT would extend this target, with new housing developments also set to be connected.

In addition, Patterson pledged that Ultrafast speeds, defined here as between 300-500 Mbps, would reach 10 million homes and small businesses by the end of 2020, as well as over 50 percent of premises by 2025. This would be achieved through fibre-to-the-premises and G.Fast technology.

In addition, responding to criticism of Openreach from other providers while denying the validity of said criticism, BT announced a new commitment to better service from Openreach.

Openreach CEO Joe Garner aims to exceed Ofcom’s 2017 minimum standards for delivering new connections on time by 6 percent.

In a thinly veiled reference to Ofcom’s current market review, Patterson said:

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"All these pledges do have dependencies, on Ofcom and the government, to ensure the right policy and regulation framework exists. They have the potential to underpin the digital revolution of the UK for the years to come.

"We have a thriving digital economy. It’s estimated that this year the internet will have contributed over £180 billion to our economy. That’s about 10 percent of GDP."

Patterson also used the announcement to praise the regulatory status quo and defend his company’s record thus far on broadband in the UK.

"Ofcom deserves credit for helping the UK to have the most competitive communications sector in the world, achieved primarily to the equal access that all communication providers enjoy to the Openreach network.

"BT has played a vital role by investing £20 billion of capital over the last ten years in our network. £10.5 billion of that money has gone to Openreach so that the whole industry and the whole country can benefit from a properly maintained and upgraded network, open to all communication providers wishing to provide voice and broadband services."

The event follows a letter to the Financial Times on 21 September from other major providers such as Sky and TalkTalk demanding that Ofcom refer to the Competitions and Markets Authority to conduct a full market review of the telecoms sector.

A spokesperson for Sky was unimpressed by the new BT commitments:

"BT has been letting down customers for years with under-investment and poor quality service. What the British broadband market urgently needs is radical reform, not calculated manoeuvring and caveats to protect BT’s self-interest.

"Only a truly independent Openreach will unlock the investment, innovation and competition required to deliver the digital connectivity of the future."

Paolo Pescatore, Director, Multiplay and Video at CCS Insight, said:

"This is just the latest tussle between BT and its rivals, in light of BT’s acquisition of EE and Ofcom’s strategic review of the digital communications market.

"More so given that many want Openreach to be separated from BT, this latest move suggests that BT is concerned by these comments and needs to come out fighting ahead of any formal announcements from Ofcom and the Competition and Markets Authority.

"BT is putting up a strong defence. Its latest pledges will address some of the shortcomings raised by its rivals, notably investment and service quality.

"However, this is unlikely to satisfy its rivals as they will still call for full separation, lower prices and greater access to BT’s network. While there are merits of BT’s acquisition of EE and retention of Openreach, regulators will be duty bound to listen to the comments of their competitors who will feel less positive about the transaction and the increasing monopolisation of the telecoms sector."

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