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Ofcom's order for BT to be legally separated from its infrastructure subsidiary Openreach has been welcomed by rival broadband firms.

Earlier this year, the watchdog said BT must give more independence and investment powers to Openreach, with the broadband subsidiary being run as a distinct and legally separate company with its own board.

Ofcom said these proposals, which were unveiled in July, would provide Openreach with the greatest possible degree of independence without separating the companies entirely, and lead to decisions being taken for the good of its customers and the wider telecoms industry.

However, the regulator believes BT has not done enough to ease its concerns over competition, particularly its belief that BT has the "incentive and ability to favour its own retail business when making strategic decisions about new network investments by Openreach".

Responding to the news, Vodafone said it shares Ofcom's disappointment at BT's performance and its "reluctance to undertake the transformation necessary to ensure the UK has the competitive fibre networks it needs for the future".

Helen Lamprell, Director of External Affairs at the company, commented: "We will analyse the detail of what Ofcom proposes and BT’s response to those details very carefully.  

"We believe Openreach should be separated from BT as soon as possible."

Vodafone added that a legal separation is required in light of a new report by Frontier Economics, which has found that BT's excess profit went up by 28 per cent to more than £1 billion in the last financial year.

Ms Lamprell said it "beggars belief" that BT felt it could increase its excess profits at this time and "further underlines the need for an independent Openreach". 

"We believe Openreach needs to be a stand-alone business headed by a truly independent Board of Directors bound by statutory duties to treat customers equally and give a true and accurate view of Openreach’s underlying assets, costs and profits," she stated.

"Only then would it be a simpler and more transparent business for Ofcom to regulate.”

Dido Harding, Chief Executive of TalkTalk, added that Openreach has been "letting consumers down for far too long" and become a household name "for all the wrong reasons".

She stated that while TalkTalk is pleased Ofcom has made a decision on its future, it believes that legal separation does not go far enough to "deliver the broadband consumers deserve".

However, she acknowledged it is "a step in the right direction" and said consumers will be interested to see how these changes will improve their service.

"We will continue to push Ofcom to ensure the plans deliver real, meaningful improvements quickly," Ms Harding continued.

"If major changes cannot be delivered, then they should move to structurally separate Openreach once and for all."

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