Sky and TalkTalk call for Openreach separation from BT in fear of EE merger market domination

Ofcom has announced that it will review the UK’s digital comms infrastructure, prompting both TalkTalk and Sky to call for the break-up of BT.

Jeremy Darroch, group chief executive, Sky

In particular, the telecom firms desire the separation of OpenReach, the company which maintains the UK’s internet infrastructure, from BT, because of fears the telecom giant will hold a majority of the nation's ISP industry upon the completion of its £12.5bn merger with EE.

Announcing the review, Steve Unger, Ofcom acting chief executive, said: “We have seen huge changes in the phone and broadband markets since our last major review a decade ago. Only five years ago, hardly any of us had used a tablet computer, high-definition streaming or 4G mobile broadband.

“Our new review will mean Ofcom’s rules continue to meet the needs of consumers and businesses by supporting competition and investment for years to come.”

This spurred Sky and TalkTalk's chief executives to call for the dissolution of telecom rival BT in its current form.

Jeremy Darroch, group chief executive of Sky, said: “Structural separation of Openreach is at the heart of creating a sustainable industry; one that provides the capacity and incentive to invest whilst also harnessing the power of multiple competing retailers to drive higher take up and lower prices for customers.

"Ofcom must now take the opportunity to address Openreach’s conflict of interest as a subsidiary of BT or risk extending the problems that are affecting the industry and its customers today."

TalkTalk chief executive, Dido Harding, added: “We are delighted that Ofcom is undertaking a proper strategic review of the market. Britain can have a fantastic digital future with better infrastructure. A decade ago, Ofcom failed to break up BT and instead created Openreach.

“It is increasingly clear that the current market structure is not fit for purpose. BT’s proposed merger with EE threatens to make a bad situation worse. It will further starve Openreach of the focus and capital it needs and will extend BT’s dominance of the market.”

Harding claimed that the EE-BT merger would see the pair control nearly 40 per cent of the entire consumer telecoms market and nearly 70 per cent of the wholesale market.

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