The Vodafone chief has accused BT of trying to turn Britain’s telecoms sector back into a monopoly by forcing broadband on to its old network and giving consumers speeds that are slower than in southern Europe.
Vittorio Colao called for BT’s infrastructure division, Openreach, which operates the cable network, to be spun off into a separate company so UK consumers could get access to modern, fast fibre connections.
He said splitting off Openreach would stave off the biggest risk facing the industry in the UK and Europe – “remonopolisation” – which could turn back 30 years of increased competition and better service.
BT responded that Colao’s comments were “highly misleading” and that the UK was one of the world’s most competitive telecoms markets.
Colao has called for tougher regulation of BT after it buys EE from Orange and Deutsche Telekom, which will own about 12% of BT as a result. Colao said the deal would create a dominant operator in the telecoms market that increasingly sold bundled packages of broadband, phone and TV.
He told BBC Radio 4’s Today programme: “Companies like BT and Deutsche Telekom – and not by coincidence Deutsche Telekom is now the largest shareholder of BT so we have a German BT or a Deutsche BT – like to use what they have, which is the copper network, modernise it, to reduce competition. Companies like us or Sky or TalkTalk are forced to use them.”
He said UK households used the internet a lot but they were doing so on slow lines compared with other countries. “We are talking 1m megabits per second whereas in southern Europe I’m selling broadband with 100, 200, 300 megabits,” he said.
Colao criticised BT as he announced a return to earnings growth for Vodafone in the first half of the year and nudged up its guidance for full-year profits. Core earnings for the six months to the end of September rose 1.9% to £5.8bn, he said.
BT’s rivals have called for Ofcom to break up BT to prevent it from controlling Britain’s broadband market. The telecoms regulator is conducting a review of the telecoms industry and BT has pledged to accelerate its rollout of faster fibre connections in an attempt to avoid further criticism.
Through Openreach, BT controls the last section of the phone network that goes into a customer’s house. Colao said half of the lines Vodafone took from Openreach were delayed. “British consumers experience delays, delays, delays,” he said.
BT said: “Fibre coverage stands at 90% in the UK compared with just 25% in Italy so we are amazed that Vodafone are suggesting the UK can learn from southern Europe. The UK is a broadband leader and much of that is down to the billions of pounds that BT has invested while other companies have sat on the sidelines with their hands in their pockets.”
