Is the BT Openreach debate distracting the mobile industry?

Is the BT Openreach debate distracting the mobile industry?

The Mobile team explores the potential separation of BT and Openreach and debates whether it is distracting the industry.

Kezia Joseph says...YES

The focus on Openreach is distracting the industry away from the bigger picture, the fact that BT is on the cusp of moving into the mobile market.

Following its purchase of EE, BT will become both a fixed and wireless telecoms giant. If EE becomes part of BT that will not reduce the number of mobile operators in the UK market (unlike Three’s proposed takeover of O2)/ The question is whether by being part of BT, EE would gain a competitive advantage in terms of access, quality of service and pricing to BT Openreach’s access network.

Given that BT was forced to separate off its Openreach in the last major Ofcom review of the telecommunications market 10 years ago, there is no reason to suppose anything will change to the disadvantage of the other service providers.

So far the Openreach debated has centred on claims by competitors that they are discriminated against by BT, with Vodafone, Virgin Media, TalkTalk and Sky all voicing complaints. These concerns are highly controversial and are yet to be conclusively proven.

Any favouritism in the mobile space would be more obvious. Openreach already has a well-established neutral relationship with the mobile operators and any shift would be obvious. It would need to come from a directive from above because BT and EE staff are used to working separately. Often when two companies merge there can be a sense of distrust between the two sides, so it seems a little far-fetched to suggest the Openreach employees would suddenly become biased to those within BT.

Placing Openreach at the centre of the debate ignores some of the other issues regarding infrastructure, such as the utilisation of BT hotspots to connect smartphones over WiFi, or the impact on MVNOs. Ofcom’s review is also an opportunity to turn the spotlight on the OTT providers and how the competing services of such players are affecting mobile, rather than solely focusing on the broadband market.

Zak Garner-Purkis says...NO

The mobile industry is right to be tuning in to the BT debate. Openreach’s massive infrastructure is what makes the mobile networks and the broadband work. BT's purchase of EE would add to its already giant infrastructure capabilities and means that the market leader would also be managing the network.

That alone should have all of the industry turning focus to the BT Openreach debate, but it goes further.

You don’t need access to radio antenna’s to run a mobile network anymore. Examples in the USA already show that with ‘WiFi first’ MVNOs the possibility now exits to run a mobile network that doesn’t rely on a cellular connection.

Few people notice when their phone’s internet connection moves from their home WiFi to their network’s 4G signal. Seamless connectivity is an expectation and consumers don’t care whether it comes over a cellular network or via their broadband provider.

The combination of BT and EE will bring the largest mobile network together with the largest broadband network, bringing the two segments even closer. When you consider the possibility that BT could blur the lines further by enabling its WiFi hotspot network to connect mobiles.

All of the major players in the broadband market now either have a presence in the mobile space or are due to launch a proposition in the next year. It means competition across these two segments will become even closer and more intense.

In the B2B space offering a complete package has been a necessity for a while now. As Vodafone demonstrated with its latest changes to its partner programme the movement to unified communications is a necessity not an option.

The question of whether the largest supplier of broadband and mobile should also be the owner of a company that manages the network is one of pressing relevance to anyone in the two industries. Whether you agree with it or not the two sectors are converging and those who do not accept it will be left behind forever.







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