TELECOMMUNICATIONS giant BT and regulator Ofcom have agreed a deal over the future of the firm’s Openreach infrastructure arm, the pair announced yesterday.

BT had faced growing calls from rivals to separate Openreach from its central business, and in November the communications regulator ordered that a legal separation must occur.

BT and Ofcom said they had reached a “long-term regulatory settlement that will see Openreach become a distinct, legally separate company with its own board, within the BT Group.”

Around 32,000 employees will transfer to the newly formed Openreach Limited following Tupe consultation and after pension arrangements are in place.

Communication Workers Union deputy general secretary Andy Kerr said: “We are pleased that the uncertainty for our members in BT and particularly those in Openreach has now come to an end.

“However, nothing will happen straight away for our members, and there are a number of pre-conditions that need to be agreed before our members transfer; this might take some time.”

Prospect union national secretary Philippa Childs also welcomed the move but warned that many details still need to be resolved, including what she predicted would be “a lengthy Tupe consultation during which Prospect will ensure that members’ terms and conditions of service will be fully protected.”

Shadow culture, media and sport secretary Tom Watson said the firm “must now deliver for customers.”

“The government’s failure to create healthy competition in the UK’s digital market has caused the roll-out of broadband to be far too slow and millions of British households and businesses have paid the price, at a cost of billions of pounds to the economy,” he said.