BT Group says it has transferred 31,000 employees to Openreach, its access network business unit that has been the subject of scrutiny by competitors and UK regulatory authority Ofcom for potentially anti-competitive practices. The employee transfer is the final part of BT’s response to such allegations, which sees the unit become a separate legal entity, called Openreach Ltd., with its own board (see “Openreach to separate from BT”).
The move follows a series of critical reports from Ofcom beginning in 2015, detailing complaints from competitors that Openreach was hindering their access to fiber-optic network and other resources that Openreach was supposed to make available to all (see “Ofcom: BT can keep Openreach for now, but changes needed” and, later, “Ofcom calls for legal split of BT, Openreach”). Making Openreach a separate legal entity is designed to remove the potential impression that the company is hindering competition for the benefit of BT. The new arrangement sees Openreach become a subsidiary of BT.
“Our teams have been working hard over the last 18 months to ensure that Openreach is operating with greater strategic independence and in collaboration with customers, and the transfer of 31,000 people over to Openreach marks the final official step towards the creation of a legally separate company,” said outgoing BT Group Chief Executive Gavin Patterson. “This is an on ongoing process, and success requires continued commitment to the right behaviors, as well as transparency on how the arrangements are working in practice. We are committed to working with the regulator and industry to ensure customers up and down the country get the connectivity and customer service they deserve.”
Meanwhile, BT says it will rebrand its Northern Ireland Networks division as Openreach Northern Ireland as well.
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