BT

BT fined record £42m by Ofcom

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Ofcom's reaction to Openreach broadband installation delays was a record £42m fine, but according to Bamboo Technology Group MD Lorrin White there remains big questions over how quickly the UK's fixed line network can be improved. "As a provider working in the fixed line arena for nearly 20 years we are used to the complexities and moving goalposts of Openreach's compensation processes so are not surprised to learn that rules have been breached to avoid successful claims," she said. "While the fine reflects the significant impact that late installations have on businesses and was deemed a justified figure by Ofcom, I hope it will instigate the shake-up required to avoid such rule flouting in the future. Openreach has already agreed to meet Ofcom's demands to become a separate company - a step we wholeheartedly support and agree with - but as a telecoms provider that works with Openreach every day we only want it to succeed. "Openreach needs to commit everything it can to significant nationwide fibre investment. To do that it needs all the resources it can get."

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BT and Ofcom agree deal to legally separate Openreach

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BT and Ofcom have reached agreement on a long-term regulatory settlement that will see Openreach become a distinct, legally separate company with its own Board within the BT Group. The agreement is based upon voluntary commitments submitted by BT that the regulator has said meet its competition concerns. Once the agreement is implemented around 32,000 employees will transfer to the new Openreach Limited following TUPE consultation, and once pension arrangements are in place. Openreach Limited will have its own branding, which will not feature the BT logo. The Openreach CEO will report to the Openreach Chairman with accountability to the BT Group Chief Executive with regards to certain legal and fiduciary duties that are consistent with BT's responsibilities as a listed company. Gavin Patterson, BT Chief Executive, said: "I believe this agreement will serve the long-term interests of millions of UK households, businesses and service providers that rely on our infrastructure. It will also end a period of uncertainty for our people and support further investment in the UK's digital infrastructure. "This has been a long and challenging review where we have been balancing a number of competing interests. We have listened to criticism of our business and as a result are willing to make fundamental changes to the way Openreach will work in the future." The transfer of around 32,000 employees, under TUPE regulations, will be one of the largest such transfers in UK corporate history. It will take place once the agreement has been implemented and pension arrangements are in place for these employees. Under the agreement, Openreach will manage and operate its assets and trading but ownership of those assets and trading will remain with BT. The agreement builds on changes that BT has already made to the governance of Openreach in recent months. These include the [...]

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BT denies squeezing customers after paying £1.2bn for Champions League

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BT has denied customers are being forced to foot the bill for a new £1.2bn Champions League football rights deal after securing the contract in the wake of inflation-busting price rises for its broadband and phone services. The group has paid £1.18bn to fend off Sky and renew exclusive broadcast rights for Champions League and Europa League football. The deal which runs from 2018 to 2021, represents a 32% increase on the cost of its current three-year contract. The rights win comes after the telecoms group prompted outrage among customers and consumer groups for introducing its third price hike in 18 months at the start of the year. In January, BT said it was to raise the cost of broadband and calls. It also announced that BT Sport will no longer be given away free to its BT TV customers and that it would begin charging them £3.50 a month for the service from August. The broadband and phone call price rises will affect about 10 million customers from 2 April, equating to increases of about 5% to 6%. Analysis BT's £1.2bn Champions League splurge is price of staying in Sky game The telecoms group needed to win at all costs after a rocky year – though it may face a tougher battle over the Premier League Read more BT denied customers were being squeezed to fund its battle with Sky for premium sports rights. “I don’t think that is true,” said John Petter, the chief executive of BT’s consumer division. “The broadband market is very competitive. Our share of the broadband market has been growing and customers vote with their feet [if they are unhappy]. The fact that the market is competitive means our offering has to represent good value for money. Line rental has not increased, for example. [...]

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BT combats fraud with Tollring’s Credit and Fraud Management System

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BT has gone live with Tollring's new real-time Credit and Fraud Management System (CFMS) on its Wholesale Hosted Centrex (WHC) platform. The cloud-based CFMS has been delivered in BT Wholesale's data centre to provide real-time fraud detection and protection of the hosted platform. The CFMS monitors call trends, implements rules and triggers alerts to protect resellers' and their customers from illegal usage and ‘bill shock'; and the credit management element of the solution constrains legitimate spend in order to manage ‘risky' customers. Fraud and credit management is a powerful combination. Each call must pass through four rigorous gates including a risk register of continents, countries and regions, a blacklisted destinations register, followed by rule profiling before adhering to spend limits. Live dashboards, reports and notifications keep BT informed in real-time, enabling fraudulent calls to be terminated and destinations blocked to prevent further fraud from happening. Dave Axam, Director Hosted Communications at BT Wholesale, describes fraud as one of the key challenges in the marketplace. He said: "We are seeing that fraudsters are becoming increasingly astute, making more frequent, smaller hits, which render the ‘capping' approach insufficient in the battle against fraud. "So BT is taking a completely different approach by looking at the analytical capabilities within the network, customer data and trends, and taking a proactive stance by anticipating what might happen. "We believe Intelligent analytics is the only way to stop the next type of fraud. By embedding Tollring's intelligence and analytics tools into the network for hosted communications, we are providing our partners and their customers with a whole new level of security." Tony Martino, Managing Director of Tollring, added: "We have taken major steps to tackle the key issues of fraud and credit management in cloud telephony. We believe that the adoption of this new product provides [...]

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Ofcom Confirm NO Openreach Split from BT, But Big Change is Coming

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The telecoms regulator has today published its preliminary proposals as part of a major Strategic Review of the United Kingdom’s Digital Communications market, but the big news is they’ve decided NOT to completely split BT from its national broadband and phone network (Openreach). Openreach was setup a decade ago after Ofcom’s original review in 2005, which among other things forced BT to open part of their network to competition (“functional separation“) and introduced Local Loop Unbundling (i.e. allowing rival ISPs to install their own kit in BT’s telephone exchanges, giving them more control over ADSL broadband and phone). Since then the market has evolved and the new “fibre broadband” (FTTC) services don’t offer the same kind of control or price flexibility as the older LLU ADSL solutions. Meanwhile many of BT’s rivals feel as if the operator still has too much control over Openreach and aren’t investing enough in their infrastructure, which they claim has damaged competition and performance. By comparison BT say they’ve invested billions into the national infrastructure, are delivering a good level of service (i.e. meeting Ofcom’s targets) and claim that their rivals seek a free ride off the back of all their hard work. BT has also warned that splitting Openreach could damage their plans to invest in future “ultrafast” G.fast broadband upgrades and the 10Mbps USO (details). Furthermore there were also fears about the risk from a protracted legal battle, concerns over how BT’s huge pension deficit and group debt would be split and uncertainty over who would provide Openreach’s future investment. On the other hand BT’s rivals believe that an independent Openreach could have fostered investment into superior FTTH/P technology and made the market more open and fair for everybody. Ofcom’s job in all this was to navigate the maze of conflicting claims and [...]

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BT Pledge Over GBP1bn to Boost UK Broadband, But is it New Money

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The CEO of BT Group, Gavin Patterson, has made a final plea ahead of tomorrow’s Strategic Review outcome and informed the Mobile World Congress event in Barcelona (Spain) that he would “significantly” increase investment (£1bn+) in order to further improve national broadband connectivity. Reports at the weekend suggested that Ofcom would not move to separate BT (here) from control of their national UK phone and broadband network (Openreach), although they might keep that option on the table. Never the less Patterson cannot afford to trust in leaks to the media, not least because BT will officially learn of its fate at the same time as everybody else.. tomorrow. Gavin Patterson said: “There’s a significant investment that we are ready to make now in the next generation of technology, more Fibre-to-the-Premise [FTTP], G.fast (and) Fibre-to-the-Cabinet [FTTC] … That’s a big decision, we are ready to make it if we get some regulatory certainty coming out of the Ofcom review. Openreach is the only national player and it is very heavily regulated. We believe having Openreach as a unit within the BT group is good for investment and for research and development, and insures you get a national service at competitive prices. If it’s ever separated, would you see the same investments being made? I very much doubt you would.” According to a related report on the FT, that “significant” investment would see BT spend £1 billion+on improving UK broadband connectivity. But the commitment lacks key information, such as whether or not this actually reflects an existing pledge or even if it has separated out Capex (capital expenditure) from Opex (operating expenditure). Readers may recall that BT made a big commitment last September towards improving national broadband connectivity (here) and the bulk of that is focused on their G.fast deployment. BT intends [...]

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BT Set to Avoid Openreach Split as Ofcom Opts for the Middle Ground

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The UK telecoms regulatory will publish the outcome of their ‘Strategic Review of Digital Communications‘ on Thursday and unsurprisingly there have been some leaks, which appear to confirm our expectation that Ofcom will NOT move to split BT from control of its national phone and broadband network (Openreach). Instead Ofcom is expected to impose greater separation of Openreach from BT, which could involve giving rival ISPs more access to Openreach’s national network of cables and telephone exchanges (a highly likely outcome). Potentially Ofcom may also require BT’s network access division to have its own separate board, which the operator won’t be very happy about. However it’s understood that the regulator will opt to keep the option of full separation on the table, which could be used as a bargaining chip should BT move to aggressively oppose their new measures. A BT source told The Telegraph that this may yet result in separation: “It could get to the point of separation by the back door” (i.e. if the price of Ofcom’s new regulation feels too high to stomach). Naturally all of this is to be accompanied by a variety of other changes to market regulation, which will go well beyond the question of Openreach’s separation. We’ll find out more on Thursday.

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Centre for Policy Studies Calls for Ofcom to Initiate BT Breakup

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BT to be separated from control of their national UK broadband and phone (Openreach) network, which the group suggests could “provide a market with a level playing field between all players.” At present Ofcom’s on-going Strategic Review of Digital Communications is said to be “seriously” considering the option of breaking up BT, which if appropriate would require the regulator to refer the operator to the Competition and Markets Authority(CMA). Politicians seem to be divided on the topic, with many supporting such a split (here) and others, such as Ed Vaizey (Digital Economy Minister), suggesting that it has “lots of potential to backfire” and existing “regulations have proved very effective” (here). Meanwhile BT contends that it has continued to meet Ofcom’s existing regulatory targets and that any attempt to split their business might tie the process up in legal battles. Questions also remain over how BT’s debt / pension pile might be apportioned in the event of a split, as well as the impact on consumer prices from all of the related changes (better services cost more money) and what kind of market model might be adopted in its place. BT has also warned that their plans to roll-out ultrafast (G.fast) broadband could suffer, but that may be a moot point if FTTH/P ends up becoming the favoured course. Equally there’s a risk that separating Openreach might harm investment in alternative network operators, since Openreach would perhaps be seen as the bigger target for investment. It also remains unclear whether smaller ISPs on Openreach’s network would be winners or losers in such a market. In to this seemingly endless debate steps the CPS, which believes that separation of BT may be the best long-term fix for the United Kingdom’s telecoms market. Daniel Mahoney, CPS Economic Bulletin, said: “The UK’s broadband infrastructure [...]

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BT Fighting Against Separation from OpenReach

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Instead of going on a charm offensive BT’s CEO, Gavin Patterson, appears to have taken a more confrontational approach by privately writing to every (650) elected UK Member of Parliament and highlighting how he felt that many of their recent claims against the operator were “inaccurate and misleading“. The reaction, which according to The Telegraph also delivers a point-by-point rebuttal of the recent “Broadbad Report” that was signed by 121 cross-party MPs, comes at a time when Ofcom are said to be “seriously” considering (here) the option of splitting BT from control of their national broadband and phone network (Openreach). BT’s CEO, Gavin Patterson, said: “Separation would be costly and divert time and funding away from investment in UK infrastructure, at a time when the UK is at a crucial stage of its development as a world-leading digital nation. Surely those impatient to see yet more homes and businesses get better broadband would rather that the money, time and effort went into the next stages of Superfast broadband, and then into Ultrafast?” In fairness the “Broadbad” report had plenty of big flaws, such as using out of date information for broadband coverage and failing to do a deeper analysis of its own claims, which is disappointing because it arguably missed a golden opportunity to highlight some very real failings and therefore risked damaging the credibility of its own message. Never the less the report did succeed in chiming in with all those politicians and people who, in a world where broadband is increasingly being seen as a vital utility service, simply expect an awful lot better from BT and its national service / network delivery business. Patterson’s letter also pointed to praise of its network from around the world and made specific mention of Australia, which recently highlighted Openreach as [...]

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Leicester UK City Council to Deploy FREE WiFi Internet Connectivity

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Residents, businesses and visitors to the most popular parts of central Leicester (e.g. the Clock Tower, Jubilee Square and outside the Richard III centre), which is a city in the East Midlands of England, will be pleased to learn that BT are planning to roll-out a free WiFi zone in the area. At present BT has only just begun their initial planning and survey work for the 10 year deal, with the new network expected to go live sometime during theSpring 2016. The deployment, which will utilise the existing CCTV network for capacity, won’t cost the council anything and may also be used to help improve local 4G mobile phone coverage. Rory Palmer, Deputy City Mayor, said: “We already have free wi-fi in our libraries and we know how popular wi-fi hotspots in city centre coffee shops and other venues are. We’d like to be able to extend this offer so that people can get online even more easily. Free wi-fi will also support our plans to promote economic growth in the city as well as being an essential infrastructure for a modern connected city.” BT has also made similar deployments in Cardiff, Gloucester, Glasgow, Nottingham and Newcastle etc.

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