BT’s CEO mulls selling stake in Openreach, but not towers

News

Reuters says Philip Jansen (pictured) is “open minded” about the possible sale of a stake in its wholesale access unit.

Reuters reports that BT’s CEO, Philip Jansen, is willing to consider the possibility of selling a stake in the UK company's Openreach wholesale unit after regulation regarding fibre networks is ironed out next year.

There have been rumours of BT selling Openreach in the market for months, which previously the UK incumbent has dismissed.

At Morgan Stanley’s Technology, Media and Telecom conference he said that BT is undervalued given its assets, one of which is Openreach. He said in part this was due to a lack of regulatory certainty.

Regulator Ofcom is scheduled to rule on the return Openreach will be allowed to make on its planned £12 billion fibre to the premises roll out in March or April.

Depends on upcoming regulation

Reuters quoted him saying, “Would I be open minded about looking at a minority interest on it, moving that on to someone else? Potentially. But I can’t see us doing that until well after we’ve agreed the regulatory framework, until March, April next year.”

Jansen credited Ofcom with paying attention to the right areas, such as price indexation and forced migration to new networks. He stressed that keeping control of Openreach made strategic sense. Jansen said, ““I am very confident we will land in the right place, but we’ll have to see how that gets articulated.”

He added, “The bit still uncertain is how is the fair bet going to actually work. There has to be a fair return.”

Towers R Us

Jansen was less interested in releasing the value from BT’s mobile infrastructure, such as its towers, which many European operators are pursuing, including Vodafone, Orange, TIM, Iliad and more.

He concluded, according to Reuters, “There are things that we can consider but we are not really interested in sale and leaseback”.