“There is one matter on which the whole nation is agreed: the future is digital. The question is how to secure investment in our digital infrastructure. But at present the debate is foundering on the inaccurate claims of companies who are gaming the regulator to secure commercial advantage.
One claim is that BT’s infrastructure division Openreach earns profits that pay for BT’s sports content rights. This is untrue. Our investment in sports rights has been paid for entirely out of the cashflows of BT Consumer.
Another myth is that Openreach is investing in obsolete technology. This ignores the £3 billion we’ve spent rolling out fibre broadband to 26 million premises in recent years. As a result the UK has faster download speeds than Germany, France, Italy and Spain. Nine out of ten homes can access superfast broadband. According to the Boston Consulting Group, the UK has the largest digital economy in the G20 by share of GDP.
This debate should be decided by who has the most compelling and credible vision for the future. BT plans to bring ultrafast speeds to 12 million homes and businesses by 2020, using fibre-to-the-premise and new G.fast technology. Our ultrafast plan is commercially viable without taxpayer support. We have also said that we stand ready to support the government’s ambition for universal broadband coverage. Our critics have been notably silent on this.
Breaking up BT would undermine network investment. It takes the whole of BT Group to make the case for massive network investments. Openreach cannot do it on its own.
Those arguing that splitting BT will boost investment fail to appreciate the huge risks. It would cost billions to split BT. This would be better spent on investment in networks. Openreach is best placed to invest as part of BT Group, as it benefits from lower funding costs, access to massive R&D capabilities and the ability to spread risk across a bigger business. And because it serves more than 500 communications providers on equal terms, these benefits flow to the whole industry.
In July, we made a proposal to Ofcom for reforms of Openreach to further strengthen its independence, which would preserve these benefits while minimising disruption and cost. We believe this is the best way to deliver the UK’s digital future.”
CEO BT Group