The new unit works alongside BT’s existing retail, wholesale, and global services units, but it principally oversees access to its local network for BT rivals. This is known as the first mile of connections, which is the fibers and wiring linking millions of homes and businesses in the UK to communications providers’ networks via local BT exchanges.
The unit will also be responsible for the national local BT network. Openreach employs approximately 30,000 people, including nearly all of BT’s 25,000 engineers.
The big day has arrived, said Steve Robertson, Openreach’s chief executive in a statement. The whole Openreach team is utterly committed to providing Britain’s communication providers with equivalent access to the local access network and to serving all our customers in the same even-handed way.
The creation of the new division is part of the compromise reached with Ofcom last June. BT had been under a very real threat of being broken up, as rivals felt that BT’s ownership of the last mile of copper wires into homes and business, the so-called local loop, gave BT’s customer-facing arm (BT Retail) an inherent advantage in the provision of voice calls and internet access services to businesses and households. A major part of the agreement with Ofcom was the creation of an Access Services business unit to ensure that competitors receive access to its network on the same terms as BT Retail. In return, BT gained lighter regulation.
BT said the new division will have revenue of over 4bn pounds ($7.16bn) and assets of approximately 8bn pounds ($14.33bn). It will also have its own headquarters, although chief executive Robertson will effectively have to deal with two bosses. On the one side will be the BT board, and on the other will be a newly created Equality of Access board.
Openreach’s access network is 120 million kilometers long and covers 30 million customer lines from approximately 5,500 local exchanges in the UK. The network will supports 300 million telephone calls and 350 million internet connections every day.
