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Ofcom has described the progress being made on the legal separation of BT and Openreach as "broadly satisfactory".

In March last year, BT agreed to the watchdog's demand for its infrastructure subsidiary to become a distinct and legally separate company.

As part of this agreement, Openreach is required to offer its own distinctive branding, with any traces of BT's imagery removed to reflect its greater independence.

The deal with Ofcom also means that Openreach is being run by a newly-established board, the majority of which consists of directors independent of BT.

In its first progress report, Ofcom said many of the governance changes it wanted to see have now been implemented, such as the BT logo being removed from branding and new compliance procedures being put in place.

However, it stated that some remaining steps are yet to be completed. For instance, Ofcom said legal separation has not been finalised, as complexities with BT's pension scheme mean the company is yet to transfer Openreach employees to a new scheme.

Nevertheless, Ofcom acknowledged that BT will commence the transfer process in the coming months.

The watchdog went on to note that there have been positive signs on investment, with Openreach introducing a "Fibre First" strategy and committing to investing in faster and better broadband networks.

However, it stated that while Openreach has extended its planned rollout of full-fibre broadband by a million premises to three million by the end of 2020, it expects to see "bolder commitments over time".

"Ofcom is closely monitoring the outstanding implementation steps, to ensure they are completed without further delay," the regulator said.

"We will continue to monitor progress on implementation through regular reports. These will also assess, using a range of measures, how far Openreach’s behaviour and performance is delivering positive changes for the industry."

Ofcom added that the industry is "cautiously optimistic", with many telecoms companies that depend on Openreach stressing the need for the new arrangements to lead to "tangible, positive change, such as greater transparency in Openreach’s decision making". 

Despite this, Ofcom pointed out that some remain uncertain whether the separation from BT will allow Openreach to "act with greater independence and treat all its customers equally in practice".

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