Blueprint
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the
Securities Exchange Act of 1934
Date of
Announcement: 10 March
2017
BT Group plc
(Translation
of registrant's name into English)
BT
Group plc
81 Newgate
Street
London
EC1A 7AJ
England
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form
20-F..X...
Form 40-F
Indicate
by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information
to the Commission pursuant to Rule 12g3-2(b) under the Securities
Exchange Act of 1934.
Yes
No ..X..
This announcement contains inside information.
March
10, 2017
BT AND OFCOM REACH AGREEMENT ON FUTURE GOVERNANCE OF
OPENREACH
Openreach to be a legally separate company within BT with its own
Board
Around 32,000 employees to transfer once pension arrangements are
in place
Openreach Limited to have its own brand without the BT
logo
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 Board1, 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.
Openreach,
which builds and maintains the tens of millions of copper and fibre
lines that run from telephone exchanges to homes and businesses
across the UK, will assume greater independence under its own Board
of Directors.
The
agreement is intended to be comprehensive and enduring, helping to
ensure the UK telecommunications market remains one of the most
competitive in the world. Hundreds of telecoms companies already
use Openreach and its national network on an equivalent basis, and
many others are competing with them. That will continue with
enhanced safeguards to ensure all of Openreach’s customers
are treated equally.
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.”
1Following the implementation of the agreement which is
subject to the satisfaction of certain conditions, including those
relating to pensions (see notes to editors).
The
agreement, when in place, will provide BT and other companies with
greater regulatory clarity and certainty which is vital for
investment. This will help the UK retain its position as the
leading digital economy in the G20 by share of GDP, with the
largest superfast network among major European
nations.
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.
The
Openreach CEO will report into 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.
The
commitments that BT has notified to Ofcom are available at:
http://www.btplc.com/UKDigitalFuture/
For further information
Enquiries
about this news release should be made to the BT Group Newsroom on
its 24-hour number: 020 7356 5369. From outside the UK dial + 44 20
7356 5369. All news releases can be accessed at our web site.
You can also subscribe to receive
all BT announcements here and you can follow us on Twitter
here.
Investor and Analyst Call at 09:30 UK time, 10 March
2017
Dial in:
· Tel
+44 (0)1296 480 100
·
Passcode:
March
· Lines available from approximately 09:15 UK
time
Conference call replay:
·
Tel
+44 (0)207 136 9233
·
Passcode:
9112 4663
· Replay available from 11:00 UK time for 7
days
The
person responsible for making this announcement is Dan Fitz,
BT’s Company Secretary.
Notes to Editors
The
implementation of the agreement is subject to the satisfaction of
certain conditions. These include new legislation providing that
the new company’s pension liabilities will be covered by
equivalent arrangements to the current Crown Guarantee, thereby
ensuring the transfer does not mean that its BT Pension Scheme
members lose that protection, and the BT Pension Scheme Trustee
having consented to Openreach Limited becoming a participating
employer in the scheme.
Formal
adoption by the BT Board of commitments given in favour of Ofcom is
also required to give effect to the agreed arrangements. These
commitments will replace the 2005 Undertakings given by BT to
Ofcom. Pending the implementation of the agreement, the 2005
Undertakings will continue to apply to the governance of Openreach,
unless otherwise agreed with Ofcom. The replacement of the 2005
Undertakings with the commitments once the agreement is implemented
will now be consulted upon by Ofcom.
Following
implementation of the agreement, as a subsidiary company, Openreach
Limited will continue to be fully consolidated within BT
Group.
Openreach
Openreach
Limited will be a distinct company within the BT Group, providing a
wide range of wholesale services to more than five hundred
communications providers on an equivalent basis. It will continue
to be responsible for BT’s local access network – i.e.
the tens of millions of copper and fibre lines that run from
telephone exchanges to homes and businesses across the
UK.
Communications
providers – including those within the BT Group – will
be able to buy ‘active’ services such as fibre
broadband or dedicated business lines from Openreach or
‘passive’ services whereby they can use the
business’s ducts and poles to lay their own local networks.
Openreach already competes with Virgin Media in more than half of
the country and an increasing number of independent network
operators have emerged in recent years.
Openreach,
which began operating in 2006, invested more than ten billion
pounds in capex during its first decade. This investment has helped
to make fibre broadband available to more than 26 million premises
and copper broadband available to virtually every property. Capex
at the business was £1.45 billion in the 2015/16 financial
year and gross capex is set to rise again this year as the business
begins to deploy ultrafast broadband across the UK via both G.fast
and Fibre to the Premises technologies.
About BT
BT’s
purpose is to use the power of communications to make a better
world. It is one of the world’s leading providers of
communications services and solutions, serving customers in 180
countries. Its principal activities include the provision of
networked IT services globally; local, national and international
telecommunications services to its customers for use at home, at
work and on the move; broadband, TV and internet products and
services; and converged fixed-mobile products and services.
BT consists of six customer-facing lines of business: Consumer, EE,
Business and Public Sector, Global Services, Wholesale and
Ventures, and Openreach.
For the
year ended 31 March 20161, BT Group’s
reported revenue was £19,012m with reported profit before
taxation of £2,907m.
British
Telecommunications plc (BT) is a wholly-owned subsidiary of BT
Group plc and encompasses virtually all businesses and assets of
the BT Group. BT Group plc is listed on stock exchanges in London
and New York.
1The results for the period have been revised to
reflect the outcome of the investigation into our Italian business.
Detail of which is set out in our third quarter results
announcement published on 27 January
2017. This financial information is
unaudited.
For
more information, visit www.btplc.com
Signatures
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
BT Group plc
(Registrant)
By:
/s/ Dan Fitz, Company Secretary
--------------------
Dan
Fitz, Company Secretary.
Date
10 March 2017