Comms Dealer

The Government intends to clear the legal path for the separation of BT and Openreach by maintaining existing pension protections for employees.

An amendment has been tabled to the Digital Economy Bill introducing a power to maintain the Crown Guarantee for BT workers who become part of the separated Openreach.

The move follows Ofcom's announcement last week that a deal had been struck to see telecoms infrastructure arm Openreach become a distinct company with its own staff, management, purpose and strategy.

At the time Ofcom highlighted the importance of maintaining the Crown Guarantee to implementing the agreement.

When BT Corporation was privatised in 1984 the Government wanted workers' pensions protected in the unlikely event the new BT PLC became insolvent.

The Government therefore assumed responsibility for the liabilities associated with those in the BT Pension Scheme at that time, through backing the Scheme with a 'Crown Guarantee'.
 
The Government is now legislating so that the existing Crown Guarantee on BT pensions can be amended to apply to affected members of the relevant BT pension scheme who transfer to the new Openreach company.

This will be subject to the satisfactory progress of Ofcom's proposed legal separation of BT Openreach.

Secretary of State for Culture, Media and Sport Karen Bradley said: "The legal separation of Openreach is important for delivering better broadband for consumers throughout the UK.

"A more independent Openreach which treats every broadband provider fairly should increase investment, bolster competition, and help give the country the connectivity it needs.  
 
"This amendment clears a hurdle identified by Ofcom by allowing the Government to maintain pension protections for BT Pension Scheme members who transfer to Openreach.

"It will help secure the voluntary separation of BT and Openreach and provide peace of mind to affected workers."

A team of 25 from Telford-based Entanet are limbering up to compete in the Midlands Tough Mudder Half challenge to raise money for Sands (the stillbirth and neonatal death charity) in May.

The mud-run (13th May 2017) comprises a five mile, 13 obstacle course involving a combination of hills, woodlands, water and mud.

Sally Littlefair, Marketing Executive, said: "We've chosen Sands as our nominated charity because they do vital work in supporting bereaved families after the death of a child.

"The UK has one of the highest stillbirth rates in the developed world and by raising awareness of the charity we will hopefully do our bit to change that.

"Getting everyone around the course will require a lot of teamwork and determination - and we've hopefully got plenty enough of both to see us through."

To support the team please visit https://www.justgiving.com/fundraising/teamenta

In its results for the year ended 31st December 2016 Computacenter has posted a revenue increase of 6.3% to £3.25bn (2015: £3.05bn), while Group adjusted profit before tax decreased by 0.6% to £86.4m.

The Group reported annual services revenues of over £1bn for the first time in 2016.

In the UK, strong second half revenue growth was unable to prevent a 1.1% full year adjusted revenue decline.

Supply Chain margin challenges and services revenue decline contributed to a 21.1% reduction in adjusted operating profit.

Mike Norris, Chief Executive of Computacenter, commented: "2016 was a year of mixed fortune with the UK business profitability reducing materially, but the overall Group performance showing resilience due to the strength in Germany and the turnaround in France.

"The Group should have a year of progress in 2017, with a rebalancing of profits between the first and second halves of the year towards the historical pattern.

"We expect the UK to see modest improvements due to professional services and supply chain helping the overall performance.

"New technologies and the drive to digitalisation within our core customer base is driving our customers to invest capital in new projects which is unlikely to abate. However, this is coupled with a resolute desire to reduce run rate operating costs.

"As a business we have to step up to this challenge and improve our competitive position by focusing on productivity gains and automation."

Unify has announced integration for Plantronics headsets with Unify Circuit to boost collaboration among users.

"At a time when the workforce is becoming increasingly dispersed it's vital for team collaboration to be reliable and intuitive across devices," said Luiz Domingos, Head of Product House, Unify.  

"Our integration with Plantronics audio solutions helps teams easily collaborate anywhere, anytime, from any device."

Plantronics' APIs, integrated with the Circuit platform, create an extension in Circuit that communicates with Plantronics Hub.

This integration enables call control and synchronisation between Circuit and Plantronics USB audio devices.

Plantronics Hub also provides multi-device and settings management. The integration works across desktop and web clients.

A string of annual revenue increases have qualified ProVu Communications for recognition in a listing of the top 100 fastest growing tech companies in the north during 2017.

The full list of rankings will be unveiled at the Northern Tech Awards (an event supported by technology investment bank GP Bullhound and sector champion Tech North) in Newcastle on 30th March.

Commenting on ProVu's third appearance on the trot in the listing, MD Darren Garland said: "To have achieved this in three consecutive years is testament to the ProVu team's hard work and determination and the levels of growth we have achieved."

The emergence of Openreach as a separate legal entity may be long overdue for Gamma CEO Bob Falconer (pictured) but he nevertheless strongly welcomes the news.

"I agree with Ofcom CEO Sharon White that legal separation should produce results far more quickly than a full structural separation," he said. "It gives the CEO and Board of Openreach a clear remit to get on with the job and not be distracted by BT Group requirements for cash or favour. All very welcome."

Chair of ITSPA Eli Katz agrees that this is the right move at the right time and should satisfy the competition concerns that were raised within the Digital Communications Review.

"Legal separation, rather than a more time-consuming and complicated structural separation, is the right approach and should deliver significant improvements with relatively little disruption," he said.

"The focus now for Ofcom must be to set up this new structure as quickly as possible and to then closely monitor its performance to ensure Openreach provides the necessary support to industry in order to meet the ever increasing demand for high quality communication services."

According to Lorrin White (pictured left), MD, Bamboo Technology Group, it is the responsibility of network providers to work together with peers and ensure the new independent Openreach delivers real improvements to the industry.

"Openreach must double down on fibre investment if the UK is to remain competitive - especially post-Brexit," she stated. "So we look forward to hearing more from Openreach on its investment strategy and working with it to achieve a better service for all."

For Mark Collins, Director Strategy & Policy at CityFibre, that means plugging the 'fibre gap'. "While it is welcome that these time consuming negotiations seem to be at an end, there is nothing in this announcement to suggest Openreach will now start to build the fibre infrastructure this country needs," he stated.

"Ofcom's focus needs to shift towards encouraging alternative fibre builders to do the things that Openreach can't or won't do, regardless of its legal status."

Whatever the nature of Openreach's investment decisions the company is 'better placed' to make them and deliver improvements, but under the sharp eye of the regulator, observed Dido Harding, CEO, TalkTalk Group.

"This deal will require robust Ofcom monitoring and enforcement to ensure it delivers the improvements the regulator expects," she stated.

"We hope this is the start of a new deal for Britain's broadband customers who will be keen to see a clear timetable from Openreach setting out when its services will improve."

Metronet UK CEO Lee Perkins recognises the improvements made by Openreach under the leadership of CEO Clive Selley but, like CityFibre's Mark Collins, he does not believe that legal separation goes far enough to bring about improvements to the UK's Internet infrastructure.

"There will always be a need for specialist providers to step in and fix the problems that the big providers don't fully understand," he said. 

"This is a positive first step, but to create the open competition and choice that UK businesses really need we want to see a fully independent Openreach."

Against a backdrop of mixed reactions to today's news industry commentator Adrian Barnard applauded the regulator's chief exec for getting things done. "Under the leadership of Sharon White the regulator has been more active than for many years," he said.

"Now we must all act together and push Ofcom and the Government to help make UK PLC a better connected economy."

One of the most important aspects of the BT-Ofcom deal to legally separate Openreach will be new insights into Openreach's accounts and the extent of its financial contribution to BT's overall Group figures, believes Adept Telecom CEO Ian Fishwick (pictured).

"The key issue is that Openreach never had its own set of accounts because it wasn't a separate legal entity," stated Fishwick.

"Now there will be a clear set of financial results that show the profitability and cashflow generated by Openreach.

"In the last half year it was estimated that Openreach generated about 60% of all of BT's cash. This is important because many in the industry want to understand whether Openreach's cash was being used to upgrade UK infrastructure or pay for sports rights for events such as The Champion's League."

Responding to news that Ofcom and BT have got their heads together and come up with a deal to nudge Openreach into becoming a limited company, the Federation of Communication Services (FCS) has strongly emphasised the need to ensure that the newly constituted Openreach Board reflects the aspirations of all Openreach stakeholders and customers.

"We therefore call upon Openreach, Ofcom and Government to take the next step to create a truly inclusive governance structure and arrangements to allow all industry stakeholder constituencies to be part of an inclusive and equitable investment decision making process," stated FCS CEO Chris Pateman (pictured) .

"FCS is ready to play our part in this proposed governance structure to ensure the development of effective competition and quality networks for the benefit of all customers and stakeholders."

According to Pateman, Openreach is not ‘separate' in any 'meaningful sense' of the word. "BT is still the sole owner and still the sole source of cash," he added.

But the real problem, believes Pateman, is the influence of legacy BT corporate culture. "Openreach has made progress under CEO Clive Selley's leadership," he added. "Even the Ethernet guys are starting to see improvements. But progress may have been achieved much faster if Openreach had not been held back by having to drag through the leaden slough of BT 'corporatethink'. This new ‘legal separation' does little to address that corporate drag."

BT's strong hand in shaping the look and feel of Openreach's ‘independent' Board did not go unnoticed by Pateman. Nor, once the Board was in place, did the timing of the Ofcom-Openreach deal.

"I am not aware that any industry stakeholders were consulted as part of this process," he added.

"But it is a Board with the operational responsibility for the management of Openreach's business. This is a good thing, and it gives us hope that quality of service and the value of Openreach's engineering workforce will be properly emphasised in the years to come. 

"It is not a Board in the sense of being able to raise money from anybody but BT, and dictated by BT. This we regard as a systematic weakness in the Board's ability to truly plan and behave like the long-term steady pay-back player the industry needs."

Pateman is also scratching his head over the strong arguments put forward by Ofcom relating to the difficulties posed by pension schemes in the context of structurally separating Openreach from BT.

But as part of the legal separation announced today BT is to TUPE 32,000 employees across to Openreach, which brings into question the validity of Ofcom's previous posturing on pension matters, and suggests that Ofcom did not have a grasp on the reasoning it put forward.

"This is interesting since one of Ofcom's main objections to forcing full structural separation was around the risks to the pension scheme," added Pateman. 

"We and other industry stakeholders have always argued that this was specious nonsense. So why all the delay and prevarication?

"We remain convinced that - as both Ofcom and the DCMS Select Committee independently concluded - the only sustainable and truly customer responsive Openreach is an Openreach which is fully master of its own destiny, structured and managed as a utility company and completely structurally separate from BT. Nonetheless, we are where we are."

BT and Ofcom have reached agreement on a long-term regulatory settlement that will see Openreach become a distinct, legally separate company with its own Board within the BT Group. The agreement is based upon voluntary commitments submitted by BT that the regulator has said meet its competition concerns.

Once the agreement is implemented around 32,000 employees will transfer to the new Openreach Limited following TUPE consultation, and once pension arrangements are in place.

Openreach Limited will have its own branding, which will not feature the BT logo.

The Openreach CEO will report to the Openreach Chairman with accountability to the BT Group Chief Executive with regards to certain legal and fiduciary duties that are consistent with BT's responsibilities as a listed company.

Gavin Patterson, BT Chief Executive, said: "I believe this agreement will serve the long-term interests of millions of UK households, businesses and service providers that rely on our infrastructure. It will also end a period of uncertainty for our people and support further investment in the UK's digital infrastructure.

"This has been a long and challenging review where we have been balancing a number of competing interests. We have listened to criticism of our business and as a result are willing to make fundamental changes to the way Openreach will work in the future."

The transfer of around 32,000 employees, under TUPE regulations, will be one of the largest such transfers in UK corporate history. It will take place once the agreement has been implemented and pension arrangements are in place for these employees. Under the agreement, Openreach will manage and operate its assets and trading but ownership of those assets and trading will remain with BT.

The agreement builds on changes that BT has already made to the governance of Openreach in recent months. These include the creation of an Openreach Board with a majority of independent members.

This Board will set Openreach's medium term and annual operating plans and determine which technologies are deployed, within a strategic and financial framework defined by BT. Openreach will be free to explore alternative co-investment models in private with third parties.

Vaioni Wholesale's link-up with Intelisys Global has brought immediate results by enabling sales partners to extend the initial connectivity conversation with customers to encompass, for example, higher value elements such as security.

The deal gives Intelisys Global's sales partners a route to Vaioni's range of carriers, access technologies, on-net or off-net connectivity and pricing options, along with its portfolio of network, voice and data centre solutions.

"The Intelisys Global technology services distributor model works well for Vaioni and, as a UK-based company, we see the relationship as an important enabler in supporting our international expansion," said Vaioni's MD Sachin Vaish.

"Engaging with Intelisys Global makes smart sense for Vaioni as we can work closely with the sales partners who act as agents to help develop added value for their customers," stated Vaish.

Intelisys Global MD Stephen Hackett added: "We're already starting to see how our sales partners can benefit from engaging with Vaioni Wholesale.

"We are also working alongside Vaioni to build out its EMEA market proposition and investigate further international opportunities."