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Vodafone would consider future Openreach deal

James Pearce
August 7, 2015

Operator would be open to investing if BT’s infrastructure arm is separated by Ofcom to become a standalone business 

Vodafone CEO Vittorio Colao said the operator would consider investing in Openreach if Ofcom decides to separate the infrastructure arm of BT to a standalone business.

Openreach builds and maintains BT’s network of copper and fibre-optic cables, but telecoms regulator Ofcom said it is considering spinning it off as a separate company as part of its first strategic review into the broadband market for a decade.

Speaking on a conference call following Vodafone’s latest financial results, Colao (pictured) said: “We would be prepared to buy some equity in a vehicle that could deliver fibre in good conditions to us and others.

“Whether that is an independent Openreach or another company, we’ll have to see. We think it is much better to share and compete at a service level.”

He said that one condition for Vodafone to invest in a national broadband company would be that all internet service providers, including Sky, TalkTalk, Vodafone and BT itself, would have equal access to its infrastructure.

He also called on any spun-off company to invest in fibre-optic cables as opposed to copper, and to make sure it runs directly to the doorstep of homes and businesses, known as fibre-to-the-premises (FTTP).

FTTP allows speeds of up to 1,000 mbps, almost 40 times faster than the current UK average broadband speed of 23Mbps, according to Ofcom.

Vested interest

BT CEO Gavin Patterson warned last month that any proposals to split the company in two could lead to a decade-long legal battle.

However, Colao labelled this as “blackmail” and took a jibe at BT’s recent investment of almost £1 billion to win rights to screen Premier League football games.

The Vodafone CEO said: “It’s important to us the UK gets more fibre than more expensive football.

“Any solution that is constrained by cabinet, by interferences, by level of services that cannot be guaranteed, by service workers, is not very good for competition. The insistence of BT in saying it is either investment or they will litigate is clearly indicating that there is a vested interest which they are defending.

“The cost is another well known tactic – we’re going to lay it with another company. As soon as you start doing that, we need to discuss and suddenly the game becomes how can we be part of the deployment. We can’t throw numbers out like that, but if you want to reduce costs, you need to be open and share.

“Vodafone is willing to invest in fibre as long as it is decent operating conditions and fairness in the possibility of competing.

“We are clearly opposing a vision which is BT’s vision – yesterday’s vision, a monopoly that does everything itself.

“They are talking about

defending their own monopoly

– they have 75 per cent of lines

in the country and that is clearlynot good. The position of BT is a rearguard position – some have called it blackmail – and I don’t think it is right.”

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