BT presents its rivals with a menu of five high fibre dietary delights. Yum, yum
- Openreach cuts the prices it charges competitors to use its network
- says 18 million homes and businesses could get "superfast broadband". (Which it ain't)
- A step in the right direction - but very late
- 31,000 BT staff could transfer to Openreach in October
There has been a sudden flurry of news from BT over the past few days. It must be the heat, the dust and the accursed flies afflicting sun-scorched England. In point of fact most of the news is actually about Openreach, the BT-owned subsidiary that still has pretty much of a hammerlock on most of the UK's broadband network. So, with considerable fanfare Openreach says it will make very substantial reductions (to the tune of £100 million) in the amounts it charges competitors such as Sky, Talk Talk and Vodafone to use the Openreach/BT network.
The company says the reductions should mean that end-user domestic subscribers (who have been seeing broadband access and bundled service offerings subject to to year after year of price prises well above the rate of inflation) might see prices actually fall. Well, we'll believe that when we see it.
Openreach says lower prices charged to rival broadband suppliers 'could' permit some 18 million homes and businesses to progress to what it likes to call "superfast broadband", which it defines as 24Mbps and above. Openreach CEO, Clive Selly, commented, "This offer is a win/win for communications providers, their customers and Openreach. It will help Britain's homes and businesses experience the benefits of faster and more reliable broadband."
Openreach believes that "the vast majority" of UK homes will have access to superfast broadband within the next five years. However, the company's critics (and there are still many) claim that a base level of 24Mbps cannot be classified as "superfast broadband". Nonetheless, the Openreach announcement has been met with general approval by competitors, business and domestic end-users alike. Statistics show that about 10 million UK households now have superfast broadband and it is claimed that under the new Openreach deal a further four million subscribers will now quickly be able to upgrade to superfast "for the same price or less". We'll see about that.
Talking to the BBC, Matthew Howett, of the research house Assembly said the announcement makes commercial sense because Openreach and its competitors pushing to upgrade the country's broadband infrastructure "needed to prove that the demand is out there." Surely there can't be much doubt about it?
He added, "This does seem like a genuine move to get more people onto the fibre network, and stave off criticism from those that say the UK is falling behind. It's about Openreach showing the industry and the regulator that it has changed and is implementing the further separation from BT not only to the letter, but also in the spirit of what was agreed." We'll see about that too. Let us not forget that there is no obligation or even incentive for broadband service providers to pass price cuts on to their subscribers, so why would they?
BT says the price reductions will have a significant impact on it's bottom line performance "in the order of tens of millions of pounds in this year alone." A menu of five new discounted high fibre dishes will be available for the telco's competitors to browse through and select from August 21.
BT makes much (far too much) of its "fibre broadband" offering which is nothing of the sort. It is fibre to the kerb and the street cabinet and then onto the local loop's outdated and often overwhelmed copper network into individual premises. Other countries are moving quickly to deploy full fibre infrastructure that can deliver download speeds of 1Gbps which is the accepted speed required to support 5G and all the other innovative digital broadband apps and services promised for the near future. 24Mbps certainly isn't going to cut it.
Mass migration of BT staff to Openreach
Meanwhile, it has emerged that BT is "consulting with" 31,000 of its staff (count them! It's the equivalent of the entire population of the town of Barnstaple in Devon!!) that will be transferred to Openreach in the Autumn. BT is making the changes to fulfil its obligation to the UK regulator, Ofcom, imposed under the terms of the Digital Communications Review.
Current BT CEO, Gavin Patterson, who is on his way out of the company said, "Openreach now has its own board, greater strategic and operational independence, and a separate brand. From October, it will also have its own, independent workforce." Potentially 31, 000 of them. It is estimated that it took 7,000 men to build the Great Pyramid of Giza. And more quickly than it is taking to build-out true broadband infrastructure across the UK.
The consultation period with trades unions and employees will expire on September 30. And those that are transferred across to Openreach will start work with, what, for them, will be a new company, on October 1. However, it is not known if all the 31,000 will actually go, and BT is being coy about it. History tells us that "consultation" periods, machineries and machinations in large organisations result, more often that not, in job losses. Yet again. Time will tell and we shall see.
Back in March this year, Openreach announced that it would be recruiting 3,500 new trainee engineers in a programme that would cost £6 billion. They were desperately needed. Openreach's reputation for missed appointments and botched works was a thing of national legend.
Indeed, so bad was it that on Bonfire Night (November 5) last year, rather than the traditional practice of burning an effigy of Guy Fawkes atop the bonfire (in remembrance of the Gunpowder Plot of 1605 when a plan blow up the English Parliament came within an ace of succeeding), the villagers of Templeton in Devon burned instead an effigy of an Openreach van in protest at the abysmally slow "broadband" speeds available in the area. The gesture was immensely popular and the van went up a treat.
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