BT's monopoly on broadband market 'could soon come to an end' header image

Published: 22nd Jun 2016

Ofcom has launched a once-in-a-decade review of the communications market, which could mean BT will no longer have a monopoly on the UK's broadband market.

The regulator's assessment will test whether the company is delivering the infrastructure and services the economy needs, and if it is found to not be reaching these objectives it will shake-up the market.

BT's rivals Sky and TalkTalk used Ofcom's announcement to make their concerns about Openreach heard, demanding that the division, which is responsible for physical infrastructure, be separated into a completely independent company.

If this was to occur, it would be the most drastic challenge to BT's monopoly on the broadband market, but it is more than likely that it will be resisted by the firm.

Ofcom explained the thinking behind its decision to launch the far-reaching review, with it taking this action as a response to the significant changes that have happened since Openreach was created in 2006.

Concerns regarding Britain's digital infrastructure have become more urgent in recent years, mainly due to the myriad of takeovers, mergers, partnerships and expansion projects that have happened in the industry.

This includes the recently announced takeover deal between BT and EE, reported to be worth around £12.5 billion, TalkTalk's entry into the pay-TV sector and the upcoming launch of Vodafone's broadband service.

At present, Openreach is obliged to provide wholesale broadband at the same service level and price to all firms in the market, but its £1.5 billion annual profits helps BT pay for its football screening rights and has helped fund the acquisition of EE - a deal designed to boost the firm's share of the mobile market.

Its rivals argue that while BT has improved its own network substantially, it has under-invested in that of competitors, which has had a negative impact on the broadband service used by the public.

Perhaps tellingly, Openreach has failed to reach its repair target for the last five years and has come under fire for constant delays, which have hindered both businesses and households.

However, BT has hit back at Sky and TalkTalk for their criticism. A spokesperson said: "Sky and TalkTalk have both been laggards when it has come to fibre so the UK would still be in the copper dark ages had Openreach had to rely on them."