19th Jul 2016 07:46
LONDON (Alliance News) - The UK's Culture, Media & Sport parliamentary committee has told telecommunications provider BT Group PLC it is "significantly under investing" in its Openreach network infrastructure division and needs to rectify the issue or face a break-up.
The committee said BT had exploited its dominant position managing broadband network infrastructure in the UK to make strategic decisions which "favour the group's priorities and interests". In doing so, the committee said BT is likely to have harmed shareholder value and customer benefits.
The MPs said BT needs to invest significantly more in the Openreach arm and allow the division much more autonomy over what it invests, where and when.
The committee said it supports media and communications regulator Ofcom's plans to establishing greater separation between BT and Openreach but said that if BT fails to "offer the reforms and investment assurances necessary to satisfy our concerns", the watchdog should then push for a full separation of the Openreach business.
The MPs said Ofcom has not placed enough emphasis in the past on improving the quality of service offered by Openreach and said the prospect of stiffer penalties being imposed on the group should encourage BT to invest more voluntarily in network infrastructure.
BT shares were down 0.7% to 392.15 pence early Tuesday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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