BT, or British Telecommunications PLC, currently known as BT Group, has a sizable component called Openreach. BT Openreach, which was founded in 2006, has 32,000 employees and owns the phone cables and telecommunications infrastructure in the UK.
In essence, Openreach owns the whole UK phone and broadband network. Those 32,000 staff are extremely busy, making some 9.5 million visits to homes and businesses year, or 25,000 per day.
The remainder of BT, along with other phone service providers like Mainstream Digital, are basically “clients” who have equal access to the Openreach network. Virgin Media isn’t included because it has its own cable network and doesn’t use the copper network.
Who or what is Openreach?
The UK’s local access network, which Openreach oversees, connects your home, place of employment, nearby store, local phone exchange, and anything else to it. The green cabinets that manage phone or broadband connections that you see on the street? These belong to Openreach.
So why is Openreach even a thing?
Because Ofcom (the UK’s telecommications regulator) needs to guarantee that all telecommunications providers have access to the network, Openreach was created. The issue was that one large business, BT, which was obviously the market leader, owned the network.
The need arose for the network to be somehow segregated from BT’s phone services section because other businesses were – very understandably – eager to get in on the act during the early days of ADSL broadband. The answer was the creation of Openreach, even though it was still wholly owned by BT, following Ofcom’s 2005 Telecommunications Strategic Review (TSR).
What has just happened?
In the present day, Openreach is changing because BT Group decided in March 2017 to spin it out as a distinct legal entity. Once more, this was done in response to a request from Ofcom. This is taking place since the previous structure, in which BT Group owned Openreach, wasn’t entirely successful.
There have been notable achievements, not the least of which is the post-2010 rollout of an £800 million fiber network that revolutionized UK non-cable internet connection speeds.
However, Openreach has faced criticism in Parliament and elsewhere. Fiber rollout has taken longer than initially anticipated, and network investment has not been as high as it could have been, particularly in rural regions, where network speeds continue to fall short of Ofcom’s minimum aim of 10Mbps. More than three million UK customers are still impacted by this.