Ofcom orders BT to run Openreach as separate company

LONDON, July 26 (Reuters) - British regulator Ofcom on Tuesday said BT's network division should become a legally separate company within the telecoms group, to boost broadband coverage and avoid the need for a full break-up of the company.

Rivals to Britain's biggest telecoms groups had lobbied hard to persuade Ofcom that competition would be best served by completely separating BT's Openreach network of connections to homes and offices from the rest of the BT group (LSE: BT-A.L - news) .

Instead the regulator said Openreach should become a separate company with its own board. A majority of non-executive directors, including the chair, would not be affiliated to BT. They could be appointed and removed by BT in consultation with Ofcom.

The regulator will now launch a short consultation, running until October 4, to get the opinions of those in the sector. (Reporting by Kate Holton; editing by Sarah Young)