Openreach was established in January 2006. Following a strategic review of the telecommunications market by Ofcom, BT undertook to put responsibility for our access network in the hands of one distinct organisation within the BT group that would offer communications providers – including other BT lines of
business – fair, equal and open access to the crucial first mile of network and underpin the future development of the industry.
Openreach now provides services to around 400 communications providers in the UK, connecting millions of end users’ premises to their telecommunications networks by fixed-line local and backhaul connections.
At the heart of Openreach’s operations are the 20,000 field engineers who install, repair and upgrade lines, ensuring that households, offices and other premises have reliable local access to the telephony, internet and other services offered by their communications providers.
For the 2007 financial year, Openreach reported for the first time as a separate line of business. Revenues were £5,177 million, driven by strong market volume growth, which more than offset the impact of a price reduction for WLR (wholesale line rental).
Equivalence Management Platform
The EMP (equivalence management platform) was established in June 2006 and is the largest IT capability of its kind in the UK telecommunications industry. The EMP is the transactional platform that will underpin all Openreach’s interactions with communications providers. It was designed to deliver service with a
greater degree of automation, processing up to 100,000 orders a day and with the capacity to carry out up to 60,000 line checks an hour.
Products
Wholesale Line Rental
WLR, which enables communications providers to offer telephony services with their own brand over BT’s network, currently generates around two-thirds of Openreach’s revenue. We anticipate that this will decline as customers increasingly migrate to LLU. In December 2006, Openreach achieved a significant
milestone by placing the first live order for its new WLR capability, WLR3 (wholesale line rental analogue), on an equivalent basis via the EMP.
At 31 March 2007, Openreach was providing more than 23 million WLR lines to BT lines of business and over 4.2 million to other communications providers. Of the lines provided to other communications providers, over 3.5 million were WLR analogue lines (up 46% on the 2006 financial year) and 689,000 were
WLR digital lines (up 52% on the 2006 financial year).
Local Loop Unbundling
LLU, which enables communications providers to use the Openreach lines connecting BT exchanges to end users’ premises and to install their own equipment in those exchanges, is another key Openreach product.
There are two types of unbundled line:
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a fully unbundled line gives other communications providers the exclusive use of the copper line |
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a shared access
line only gives other communications providers the use of the high-frequency
channel used for broadband – the line will also be used by the customer’s
fixed-line voice provider. |
In
February 2007, we achieved the milestone of 1.5 million non-BT communications
providers’ unbundled lines, an increase of 640% since Openreach was created.
Combined with BT’s use of unbundled lines, this brought the total to 10.7
million (BT lines of business – 8.8 million; non-BT customers – 1.9
million) in the UK as at 31 March 2007, with 21 communications providers (operators with more than
one line) providing unbundled services from 1,512 local exchanges and Openreach
fulfilling more than 55,000 LLU orders a week.
The 1.5 million line milestone was
critical because, in Ofcom’s view, it represented the appropriate level
of competition to enable BT to announce plans to reduce our wholesale broadband
prices – offering communications providers a cost-effective alternative
to LLU.
Ethernet
Openreach continues to develop a comprehensive
portfolio of Ethernet products to support backhaul and access services for LLU
operators and a growing number of other communications providers.
Equivalence
The Undertakings completed in the
2007 financial year included some major product deliveries – the launch
of LLU and Ethernet products on an equivalent basis and the separation of management
information systems were the most significant from our customers’ point
of view. Further Undertakings remain to be implemented between now and 2010.
(See BT’s Undertakings under the Enterprise Act)
Network investment
and service performance
Service involves more than reactive
provision and repair activity; it also includes reinvigorating the access network
infrastructure – improving the health of the network leads to improved
reliability, enhanced service standards and reduced cost.
In the
2007 financial year, Openreach invested significantly in the installation of
new network components, focused on improving the quality of individual workmanship
and concentrated on identifying and upgrading the worst performing parts of
the network. This led to a decrease in the number of access network faults,
while the number of high-bandwidth services provided continued to increase.
Peaks
in demand caused by serious weather incidents are now resolved more rapidly
than they used to be. Our rapid recovery from the extensive damage caused by
the January 2007 storms is a good example of the advantages of the move to one
distinct organisation managing a fully integrated engineering workforce.
During
the 2007 financial year, around 150,000 network joints were replaced or sealed
and 9,000 network black-spots were upgraded. We also removed or replaced 25,000
defective telephone poles and renewed or upgraded 32,000 overhead wires.
Focusing
our repair activities on some of the main causes of faults, we carried out more
than 40,000 targeted improvements to local networks.
Overall
activity levels in exchanges rose by 70%, and by 31 March 2007, 655 exchanges
had been prepared for 21CN.
Investing in recruitment,
training and development
There was a major focus on talent
acquisition and accelerated development.
We recruited
1,100 field engineers during the 2007 financial year and expect to recruit up
to 400 modern apprentices in the 2008 financial year.
We also
invested more than £44 million in the training and development of Openreach
people. The Openreach Network Health Academy trained around 1,250 managers,
for example. By the end of the 2008 financial year, around 8,500 engineers will
be trained in fault prevention techniques and over 10,000 frame engineers will
be accredited to carry out frames work. In addition to such specialist technical
training, Openreach’s employees are required to complete mandatory training
to support the BT Code of Practice. There was a concerted drive to ensure that
Openreach people fully understood the behavioural implications of compliance. |
