Vodafone says it would invest in separate BT broadband unit

(Image source: BT Openreach)

Vodafone said it would be prepared to make a significant investment in any independent company that owned BT's Openreach fibre broadband network, as BT rivals continue to call for the UK fixed operator to be broken up.

Speaking during the UK-based operator's fiscal first-quarter results presentation last week, Vodafone Group CEO Vittorio Colao said the company "would be prepared to put equity in a vehicle that could deliver fibre to us and also other companies, whether it is an independent Openreach or a similar vehicle," the Guardian reported.

The company provided some caveats, however, saying that all major internet service providers would need to have access to the cables and that "final mile" connections in the future should be capable of delivering fibre-optic service directly to homes and offices (with speeds of up to 1,000 Mbps). This compares with the current average speed of UK service of 23 Mbps, the Guardian noted.

The announcement comes at a time when BT is facing scrutiny and analysis from UK regulator Ofcom, on whether BT should be forced to split off its Openreach unit into a separate company. The regulator is conducting a once-in-a decade review of the nation's communication infrastructure and services.

For its part, BT is not happy about the discussion. Last week, the company's CEO Gavin Patterson said in an interview with the Telegraph that moving the bulk of Britain's landline connections into a separate company could prompt 10 years of legal action.

Its counter proposal is to invest £4 billion over the same period of time to upgrade its hardwired broadband service with a technology called G.fast, which would allow download speeds up of up 500 megabits per second by 2025 and uses new equipment on old copper wires.

From Vodafone's perspective, adding fixed services to its existing mobile assets is now a well-defined strategy throughout the operator's European footprint. The company has now acquired cable assets in Germany and Spain and recently launched Vodafone Connect in the UK.

In Italy, Vodafone has also teamed up with rival Wind to buy a stake in Metroweb--a state-owned fibre-optic company. In this case, it is also suggesting that Metroweb serve as the shared national fibre backbone.

For more:
- see this Guardian article
- see this Telegraph story
- see this Telecoms.com article

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