Vodafone reportedly eyeing Openreach fibre co-investment

By:
James Pearce
Published on:

Analysis: Reports have claimed Vodafone is discussing co-investment plans with Openreach, a move which would show just how far the BT-owned infrastructure has come since it was ordered to split by Ofcom

Vittorio ColaoVodafone is reportedly in talks with BT-owned Openreach to co-invest in fibre-to-the-premises (FTTP), in a move that would help open up the UK market.

Regulator Ofcom ordered Openreach to become legally separate from BT, opening the door to co-investment opportunities for some of the incumbent’s rivals who had lobbied for a complete split.

According to reports in The Telegraph, talks between Vodafone and Openreach are at an “early but serious” stage, with the mobile firm eyeing investments in urban areas, as opposed to rural locations.

The move is perhaps not entirely surprising given Vodafone’s previous comments on the idea of co-investment in Openreach. Vodafone group CEO Vittorio Colao once told a group of journalist that he’d be open to the concept of group investment in UK infrastructure.

“We would be prepared to buy some equity in a vehicle that could deliver fibre in good conditions to us and others,” Colao explained.

“Whether that is an independent Openreach or another company, we’ll have to see. We think it is much better to share and compete at a service level.”

When BT announced the new structure of Openreach back in March, Mark Shurmer, the infrastructure division’s MD of regulatory affairs, said the new Openreach would be able to have discussions with BT’s rivals about joint investments.

Answering a question from Capacity, Shurmer opened the door for discussions, saying: “These new arrangements also allow Openreach to have discussions with customers about potential new or alternative co-investment models. We’re very interested in hearing from customers on thoughts they have about how to bring more investment into the UK infrastructure."

This in itself could transform the UK market. A number of providers, such as Virgin Media, are already expanding their fibre footprint. If operators can develop a co-investment model that both supports their own interests but also reduces the huge financial burden of deploying fibre, then the UK’s goal to offer everyone superfast broadband – 95% is the goal for the end of 2017 – could become a reality.

Vodafone declined to comment.