Feeds

BT plots massive Openreach outsourcing deal

Engineers could face open exit

Top 5 reasons to deploy VMware with Tegile

Exclusive BT is secretly considering outsourcing the operation of its heavily regulated and unionised network access division Openreach, sources have told The Register.

Major outsourcers are currently preparing bids for what would be a multi-billion pound contract. It's understood that EDS and Alcatel-Lucent are among the contenders.

Asked to comment on the alleged plans, BT said: "Openreach continually reviews all aspects of its cost base, operational efficiency and customer service. At any one time we may have a number of programmes in operation or under consideration with outside agencies, many of whom currently partner with us on a wide range of operational activities."

Regarding the alleged involvement of Alcatel-Lucent and EDS, it said: "We do not comment on rumour or speculation."

Openreach was established after Ofcom's strategic telecoms review in 2005. BT must abide by an agreed set of undertakings to give rival ISPs and telcos equal access to exchanges and the "last mile" of the national network.

According to BT's latest annual report (pdf), Openreach has 25,000 engineers, who would probably be offered significantly less generous benefits under an outsourcing deal, according to industry sources.

The Communications Workers Union, which represents BT technicians, said it was not aware of the plans.

It also employs 1,100 customer service staff.

An Ofcom spokeswoman said there were no barriers to stop BT from employing another company to run Openreach's operations, assuming the regulatory undertakings are kept to.

Alcatel-Lucent and EDS did not immediately return calls and emails requesting comment.

BT Global Services already has a £176m outsourcing contract with Alcatel-Lucent, signed in 2006. Former BT CEO Ben Verwaayen is now CEO of Alcatel-Lucent.

Openreach's last reported revenues, for the three months to June 30 this year, were £1.3bn. Most of those sales come from other BT divisions - external revenues from local loop unbundlers were £234m. BT is currently in talks with regulators to raise the price caps imposed on Openreach. ®

Choosing a cloud hosting partner with confidence

More from The Register

next story
Of COURSE Stephen Elop's to blame for Nokia woes, says author
'Google did have some unique propositions for Nokia'
FCC, Google cast eye over millimetre wireless
The smaller the wave, the bigger 5G's chances of success
It's even GRIMMER up North after MEGA SKY BROADBAND OUTAGE
By 'eck! Eccles cake production thrown into jeopardy
Mobile coverage on trains really is pants
You thought it was just *insert your provider here*, but now we have numbers
Don't mess with Texas ('cos it's getting Google Fiber and you're not)
A bit late, but company says 1Gbps Austin network almost ready to compete with AT&T
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.