U.K. Urges Telecom CEOs to Cooperate on InfrastructureBy
Industry execs mired in legal battles told to work together
Minister aimed for change of tone in industry roundtable
U.K. Culture Secretary Matt Hancock urged telecom CEOs in a private meeting to stop fighting among themselves and focus on upgrading the nation’s broadband infrastructure, according to people familiar with the matter.
Hancock on Thursday told the chief executive officers of carriers including BT Group Plc, Liberty Global Plc’s Virgin Media and Telefonica SA’s O2 that the government and regulators would be more supportive if there were less sniping and better collaboration, according to the people, who asked not to be identified because the meeting was private.
Hancock, who was promoted to the post from digital minister last month, is seeking greater investment in fiber-optic lines, which cover about 3 percent of the U.K., compared with Spain’s more than 70 percent. Carriers have been mired in legal battles delaying a key airwaves auction and disputes over access to the incumbent BT’s national fixed network.
The meeting was followed by a welcome development for BT on Friday, as a long-awaited proposal by communications regulator Ofcom about the network’s wholesale pricing appeared to hit its Openreach infrastructure arm’s future profitability less than some analysts had predicted.
The news was a “modest positive catalyst for the stock,” said Dhananjay Mirchandani, an analyst at Bernstein, in a note to clients. BT’s stock was also upgraded to a buy at Berenberg on Friday and rose as much as 4.7 percent, the most intraday in close to a year.
At Thursday’s meeting, Hancock said he’s seeking similar gatherings with executives every six to eight weeks, the people said. Top executives from TalkTalk Telecom Group Plc, CityFibre Infrastructure Holdings Plc and Gigaclear Plc, along with the head of Ofcom, Sharon White, also joined the gathering, they said.
A spokesman for the Department for Digital, Culture, Media & Sport declined to comment.
While it’s not unusual for the culture minister to meet with executives, the effort for a more collaborative approach comes at a critical time for decisions at BT, the former monopoly, over fiber-optic investments.
Openreach, which was forced to legally separate from the broader group last year, has pledged to spend at least 900 million pounds ($1.26 billion) accelerating its fiber buildout. But BT had been seeking concessions over the build, including on the wholesale regulated rates in the Ofcom proposal Friday, that had raised the hackles of its rivals.
CityFibre and TalkTalk have also recently announced announced their own fiber plans, making the government less dependent on the incumbent BT to meet its coverage targets.
— With assistance by Joe Mayes, and Robert Hutton