BT and Openreach’s iron grip on the telecoms monopoly has left the UK disconnected
A lack of competition in the telecoms industry – with a BT and Openreach monopoly – has left us one of the worst connected countries in Europe. We need better connectivity, writes Tim Creswick
In a a modern knowledge economy, connectivity is key. And yet, the incumbents of the UK telecommunications industry – those responsible for keeping us all online – fail to understand this. A lack of competition has left us as one of the worst connected countries in Europe. Opaque pricing, bad service and poor practices have become synonymous with an industry providing one of the most important utilities to our economy.
Six years ago, BT and Openreach were supposed to be split up. So-called “altnets” – new players in the market trying to push for innovation – have helped network expansion. But inherent in the name alternative network is the presumption there is one standard option – BT or Openreach, used interchangeably. Regulation is clearly not working. Following BT’s results last week, chief executive officer Philip Jansen, echoed the usual anti-free market sentiment we have come to expect from BT when he said on a call with journalists: “There is only one national network. … Why do you need to have multiple providers?”.
The answer to his tone-deaf statement is simple: monopolies are inefficient. They provide poor value to the end customer, and – in this case – have resulted in 30 years of failed innovation. If the status quo remains we will have decades more of failed innovation.
In the UK, our legacy telecommunications practices are hindering better connectivity, faster growth and ultimately our economy. Our national operator let the UK fall to amongst the four worst connected countries in Europe in 2021. This alarming statistic didn’t occur overnight; it was the result of a massive, lazy, and complacent organisation that has consistently failed to meet the demands of our economy for decades.
BT says that it is an “unstoppable machine”. Clearly it is not. We must not forget that in October last year, BT significantly cut its wholesale prices in a plea to attract the very customers it lost to other providers – customers that have been incredibly frustrated with the mediocre service they had received for years. Last year, Ofcom estimated that alt-net deployment had exceeded Openreach for the first time. This is because challengers are growing at a faster pace and filling a critical gap that BT has left open for years. Not only is it perplexing, but also delusional that the chief executive of BT Group could suggest its network will be the last one standing. This anti-competitive rhetoric is dangerous and outdated, and more needs to be done to prevent bad practices deepening.
The lack of competition has had a frustrating impact on residential connectivity. But the consequences for business are truly damaging. Poor connectivity is holding back our economy, at a time where we need to prioritise growth, productivity, and support scaling. Connectivity in abundance will become increasingly critical to the ways that we do business.
Britain’s longstanding productivity deficit is a centerpiece of the government’s concerns for our economy. The latest reshuffle, with the creation of the Department for Science, Innovation and Technology, shows the government’s belief in new technologies and the exploitation of existing ones to fill this gap. But businesses won’t be able to exploit the technologies of the future without the requisite infrastructure to do so. Connectivity is the most basic but crucial piece of this puzzle.
We must prioritise innovative thinking and pioneering approaches to tackling the challenges that have materialised from the years of monopolistic stagnation. This means eschewing the one size fits all approach which has dominated the telecoms industry. The system is broken, and businesses aren’t even aware how badly they are being let down.