Feeds

BT plots massive Openreach outsourcing deal

Engineers could face open exit

Boost IT visibility and business value

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. ®

Secure remote control for conventional and virtual desktops

More from The Register

next story
Déjà vu: Virgin Media jacks up broadband prices
Screw copper phone lines, we're UNIQUE, bleats telco
NBN Co claims 96 mbps download speeds for FTTN trial
Umina trial also delivers 30 mbps uploads, but exact rig used not revealed
UK fuzz want PINCODES on ALL mobile phones
Met Police calls for mandatory passwords on all new mobes
Netflix swallows yet another bitter pill, inks peering deal with TWC
Net neutrality crusader once again pays up for priority access
New Sprint CEO says he will lower axe on staff – but prices come first
'Very disruptive' new rates to be revealed next week
EE: STILL Blighty's best mobe network, says 'Frappucino' Moore
Fresh round of network stats fisticuffs possibly on the cards here
US TV stations bowl sueball directly at FCC's spectrum mega-sale
Broadcasters upset about coverage and cost as they shift up and down the dials
ROAD TRIP! An FCC road trip – Leahy demands net neutrality debate across US
You crashed watchdog's site, now time to crash its ears
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
7 Elements of Radically Simple OS Migration
Avoid the typical headaches of OS migration during your next project by learning about 7 elements of radically simple OS migration.
BYOD's dark side: Data protection
An endpoint data protection solution that adds value to the user and the organization so it can protect itself from data loss as well as leverage corporate data.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?