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October 8, 2015

Vodafone lobbies Ofcom for BT Openreach split

News: Ofcom is conducting a once-in-a-decade review of the UK telecoms market.

By Alexander Sword

Vodafone is making a submission to Ofcom calling for the break-up of BT.

The mobile operator joins BT’s other rivals, including TalkTalk and Sky, in demanding that BT’s broadband infrastructure division, Openreach, be split into a separate company.

According to the report in the Financial Times, Vodafone has complained that BT generated £6.5 billion in excessive profits from the division over the last 10 years.

Previously Vodafone had co-signed a letter to the Financial Times calling for "radical reform" of the market.

Currently Ofcom is conducting a review of the UK telecoms market that is considering a split as one of a number of options.

Despite momentum behind the campaign for the split, Paolo Pescatore, Director at CCS Insight, argues that a full split is unlikely.

"To separate Openreach would be a big call for the regulator and the competition authorities to make and would take at least two years to implement with strong potential to backfire," he said.

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"We believe that the regulator is duty bound to listen to all of the comments by all parties.

"For now it seems that the likely outcome is to retain the current functional separation (with additional remedies and stipulations) as Ofcom has said that its starting position is not that the Openreach model is broken."

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