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UPDATE BT Cut the Price of Ultrafast Fibre Optic FTTP Broadband ISP Services

Posted Wednesday, December 5th, 2012 (7:57 am) by Mark Jackson (Score 3,342)
bt openreach fibre optic broadband

BTOpenreach, which manages access to BT’s national UK telecoms network, has slashed the monthly price of its “ultra-fast330Mbps (Megabits per second) capable Fibre-to-the-Premises (FTTP) broadband service by a whopping 37%! Installation prices for the operators new On Demand (FTTPoD) solution have also been revealed.

The move, which will see the monthly rental of BT’s top FTTP product being reduced from £60 +vat a month to £38, will sadly not take effect until June 2013. The move is deliberately timed to coincide with the commercial launch of BT’s new FTTP On Demand service. At present the existing FTTP service only passes a tiny number of UK homes and businesses, although this is set to improve from next spring 2013 with the On Demand solution.

In short, FTTPoD will allow BT to install an “ultra-fast” FTTP service anywhere that their slower up to 80Mbps FTTC lines can already go (i.e. 66% of the UK by spring 2014). The downside here is that this effectively requires BT to install a new fibre optic line to your home or business, which is hugely expensive (note: the monthly rental remains the same as normal FTTP) and thus the product has more of a “premium” business user focus.

Openreach Statement on Installation Costs

As Openreach has previously indicated, CPs will be charged a distance based construction charge for FTTP on Demand due to the extra work involved in providing a direct fibre connection.

These charges are currently being finalised and will be released closer to the launch date. They will be based on a series of price bands relating to the distance between the premise and the NGA Aggregation Node.

Premises are on average around 500m away from an NGA Aggregation Node and will incur a charge of around a £1,000. Those that are closer will face a lesser charge and those further away a higher one. This is in addition to an installation fee of £500 for the service.

At present the FTTPoD service is being piloted at the following telephone exchange areas: High Wycombe, Bristol South, St Agnes Cornwall, Edinburgh Waverley, Basingstoke (from January 2013), Watford (from January 2013), Cardiff Central (from January 2013) and Manchester Central (from January 2013). A second pilot phase is due to begin in May 2013 (further pilot details here). The prices for Pilot phase 2 will be published in the first week of January 2013.

Mike Galvin, Openreach’s Managing Director of NGA, said:

Our fibre plans are going very well. Our deployment is one of the fastest in the world and our services are proving very popular with the public.

It is now time for us to focus further on FTTP and I am pleased to say that we are making it more affordable than ever. I am sure that small businesses will welcome this major price cut and I am also sure that our fibre on demand plans will be of great interest.”

It’s important to note these prices represent what ISPs have to pay BT and thus the end-user (consumer / retail) price for related products will typically be higher because providers must also factor in the need for a profit margin and additional service / capacity costs etc.

BT hopes that ISPs will share some of the FTTPoD installation cost and thus help to bring down the total price for subscribers, although in reality most providers are not infrastructure builders and would not find this economically viable. Instead some may raise the monthly rental to off-set against the heavy installation fee but that’s assuming any ISPs even choose to offer the service.

UPDATE 09:11am

We thought it might be useful to pull in one of Openreach’s old FTTPoD diagrams from earlier this year, just to help illustrate the difference between an NGA Aggregation Node and BT’s street cabinets (PCP/DSLAM below).

bt fttp on demand diagram

UPDATE 10:11am

Added a comment from Openreach’s MD above.

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21 Responses
  1. DTMark

    OK then – with the prices announced, I’m sure someone can have a go at working out the total cost – to consumers, and via the subsidy – of actually ending up with something that performs to the original goals of BDUK, that being 90% of people in each LA area can get superfast broadband which is now apparently 30Meg.

    My previous calculations suggested that if almost every single cab had a fibre twin, then s/f penetration would be about 60% thanks to line lengths and qualities.

    So while I don’t have time to do it now, I’m sure someone can have a stab at how many FTTC will need to be FTTPod to achieve the aims, add it all up, and see how much our rollout will cost in total compared with the quoted cost to build a proper fibre network, and Australia’s approach.

  2. New_Londoner

    @DTMark
    Not sure how you get to your figure? Remember 90% of us live within 1km of a cabinet.

    And as for the Australian approach, suggest you read the local press to see just how far behind target the project is, probably not the best comparator to reference!

    • DTMark

      Perhaps you can help out – what percentage of people have a D-side of less than 850m (to err on the side of caution given line quality variability) which is made of standard gauge copper? That’s the number that matters.

  3. sam

    It says most people live within 500m of an NGA, i presume that means cabinet? I love across the road from mine, it is about 25m away. They don’t give a price per metre, only the one-off £500 charge so it isn’t possible to guess what the total price would be.

    I wonder if they will allow users to choose their 39mbps tier using fibre as a lot of people just want a more reliable connection which fibre delivers. I’d be more than happy with a 39mbps download and 10mbps upload. I’m currently stuck with 4mb adsl or virgin cable so i have their 60mb cable tier but if i could have a guaranteed ~40mbps download and pay a lower price i’d be happy.

  4. Phil

    BT Openreach should cut ADSL2+ by 25% off

  5. Sadly I’m not sure if we’ll see any further ADSL2+ price cuts while the focus is on driving uptake for superfast.

  6. dragoneast

    I’ve no objection to “the consumer pays” for FTTC to FTTP upgrades. What no-body has convinced me (on FTTC at 38.7/4.5 throughputs) or my neighbours (who find ADSL at 4/0.6) meets our needs adequately is why we should pay for a nationwide FTTP roll-out, and my neighbours won’t even pay more for VDSL, they say they’ve better things to spend their money on. And we aren’t luddites or an ostrich but “normal” people who don’t expect the state to subsidise our business or our hobbies. And I sympathise: hypothermia might kill you but lack of superfast broadband won’t. And am I happy to stay indoors enjoying my superfast broadband and not going out with all the expense and inconvenience that entails – well no, I’m a human being.

  7. Andrew

    Mark,

    Can you give information on what the NGA looks like and where you can find them in the street? even if you publish some sort of documentation on it i will be gratefully, have to admit first thing that you have posted on the site i have not got a clue about, and i really want to learn about it

  8. Griff

    FTTPoD will allow BT to install an “ultra-fast” FTTP service anywhere that their FTTC lines can already go

    Can we expect to see some caveats added to that statement?

    I thinking about premises such as apartments or blocks of flats.

    • It wouldn’t surprise me if, further down the road, some caveats cropped up but it’s too early to say for sure. As for blocks of flats, BT is already conducting FTTP/B trials with existing developments and we’ll have to see how that pans out first.

  9. Bob2002

    On the face of it the “on demand” pricing is just about within the limits of what might have been expected. I’ll probably get a quote for installation when FTTC has been installed in my area, just out of interest.

    • Bob2002

      Notice that Thinkbroadband are mentioning the monthly charges will vary depending on the speed selected i.e. 330Mb/s will be more expensive than 80Mb/s. Apparently something like 80Mb/s will be in the same ball park as a FTTC product.

  10. cyclope

    2 points i would raise on this

    1, Regarding NGA agregation nodes & more importanly the location of them

    “These charges are currently being finalised and will be released closer to the launch date. They will be based on a series of price bands relating to the distance between the premise and the NGA Aggregation Node.”

    This info should be given to the customer so they are able to make an informed choice,prior to them completeing an order for FOD

    Also the prices given are the prices the ISP will pay, no doubt the price to the customer will be higher, in particular if the ISP just agrees a monthly repayment option to cover their costs, I wouldn’t be very suprised if only BT ended up selling FOD, They would no doubt want to lock customers into a 2-3 yr contract so they could keep the monthly subs low

  11. Anonymous

    And how many seconds can you use this 330Mbit service for before BT start whining and harassing you about ‘fair’ usage policy – fair to who, the shareholders?

    I have 250GB+ of personal photos and videos, I bet they wouldn’t be too happy about me backing these up over the internet. Personally I’d call that a fair use.

  12. You need to congratulate the BT team to get £38pm wholesale + connection fees + no Vonga. Unfortunately, we are still well behind those countries making the policy decisions that fibre has more potential and has cheaper long term costs. In France that £38pm + extras, is £20-£25 without extras and you have choice of provider.

    Arcep appear well ahead of Ofcom in delivering a pro-competitive transition to FTTP in urban areas.

    The current Ofcom market reviews on WLA/WBA look as if they have given up on the prospect of competition in urban areas and there is no sign of them bringing forward any incentives to invest in any type of transition to Fibre.

  13. It’s all well and good reducing the wholesale circuit cost but the cost of the data usage is ridiculous, particularly for smaller ISP’s. There’s no way a small ISP (sub 5,000 connections) can offer a decent contention when the bandwidth costs are so high.

    I agree with an Entanet statement a while ago calling for reduced wholesale bandwidth costs. This is where BT Wholesale makes their money….

    • FibreFred

      If smaller ISP’s cannot afford the bandwidth then surely they don’t have a viable business model?

      I wouldn’t start up a business selling TV’s and then start complaining its not fair I cannot compete as I haven’t got the buying power of Curries/Argos/

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