Openreach’s Katie Milligan insists super-fast fibre is our economic lifeline

It’s a drizzly morning on a back street near Waterloo station in London. The Openreach team are checking the broadband connection to a small block of flats. One figure in a yellow high-vis jacket and sturdy black boots from M&S stands out.

Looking like the boss she is, Katie Milligan is on top of the practical and technical details of delivering better wi-fi.

Last week she was named chief executive of Openreach, BT’s giant infrastructure arm, which employs 28,000 staff. As Milligan, 44, declares in a soft Scottish accent, super-fast full-fibre broadband is a ‘lifeline’ crucial to the health and wealth of the economy.

Blonde and gutsy, the Ayrshire-born boss is stepping up from her current role as deputy chief executive, replacing Clive Selley who becomes boss of BT’s international arm.

Her appointment means telecoms has become one of the few sectors where women dominate the boardrooms. Allison Kirkby is in the top job at BT itself, while Margherita Della Valle is at the helm of rival Vodafone.

Milligan’s sense of purpose is evident in her mission to provide the most powerful broadband to as much of Britain as possible, boosting connectivity in remote or rural locations.

‘We need the country to digitise,’ she says. ‘It’s essential to growing the economy. If people can switch to a full-fibre deal and get better service, then we as a nation can become more entrepreneurial. People can take part-time jobs, carers can return to the workforce.’

Milligan, who joined BT as a graduate trainee in 2004, before moving to Openreach five years later, takes the top job at a challenging time.

Although no longer a monopoly, it is under pressure from regulator Ofcom over its ‘significant market power’. It faces competition from not only Virgin Media 02, but 100 or so ‘alt-nets’ – start-up broadband providers. Most are backed by US private equity, but others, controversially, are bankrolled by the taxpayer-backed National Wealth Fund.

Another test of Milligan’s management skills will be the deactivation of the old copper wire network in phone exchanges in the switch to digital landline services.

The deadline is next year and it’s a huge project, akin to the switch from analogue to digital TV nearly two decades ago.

As we move around the exchange that serves the City of London, I can see the intricacy of this procedure at first hand. Who knew wiring could be so fascinating?

In one room, century-old wiring in Art Deco cabinets is being removed and the copper sold – at a hefty price as the metal’s value has recently soared.

In another refurbished bunker, 21st-Century cabling is being installed with considerable care.

A single copper cable served 100 homes whereas its fibre-optic substitute can handle 30,000.

But, as Milligan observes, ‘this replacement must also last for 100 years, even as the demand for broadband rapidly expands’.

Openreach, which hosts BT’s EE, TalkTalk, Sky and Vodafone on its systems, is eager to provide even more broadband. Thanks to a push to speed up its operations, the company has already rolled-out full fibre to 22 million homes and businesses, aiming to reach 25 million by the end of this year.

Last week Milligan and Kirkby reiterated their objective to reach 30 million premises by 2030 as they gave Chancellor Rachel Reeves a tour of Openreach’s apprentice and engineer training centre in Crawley, Sussex. But Milligan argues that Openreach should only strive to meet this goal if Ofcom relaxes price curbs put in place in 2021 to promote competition from the alt-nets.

Recent Ofcom proposals suggest some of the restrictions – including on its ability to offer discounts to Vodafone and other customers for access to Openreach’s network – may remain in place.

Ofcom is expected to reveal its decision next month. The forthright Milligan makes her case with vigour, arguing Openreach is being penalised for having raised its game in the full-fibre rollout.

‘Don’t get me wrong, I like competition. It forces us to raise our game,’ she says. ‘And no one expected the old telecoms incumbent to pull its socks up.

‘But we shouldn’t have to operate with one hand tied behind our backs. It should be a fair fight.’

Ofcom’s ruling may lead to more casualties among alt-nets, some of them buckling under the weight of higher borrowing and building costs – and entrenched loyalty to BT, Sky and VirginMediaO2.

Telefonica and Liberty Global which own VirginMedia 02, are reported to be about to take control of Netomnia in a £2 billion deal. London-based GNetwork was about to be bought last month until it emerged rats could gnaw through some of its cables.

As a result of the alt-nets’ woes, Openreach is losing fewer customers. In the last quarter 210,000 left, below forecasts of 239,000.

Winning people back to Openreach is part of Milligan’s remit.

She is also lobbying Government to bring Openreach to blocks of flats. At present, freeholders can block access, meaning considerable delays. The campaign has been dubbed ‘budgies, but not broadband’, since consent is not required for the keeping of a pet.

Milligan also needs to be on bid alert. Openreach is estimated to be worth £30 billion, more than parent company BT’s £20 billion.

A takeover could be blocked on national security grounds but that won’t stop the speculation.

Milligan will also need her powers of persuasion to keep winning hearts and minds given the disruptive nature of Openreach’s operations, which involve digging up pavements and blocking roads.

‘Customers like to see our people in hi-vis when they’re on duty because it looks as if they are not shirkers,’ she notes, reassuringly.