Openreach Plan Big FTTP Broadband Discounts for Late 2020
Credible sources have helped ISPreview.co.uk to uncover plans by Openreach (BT) to introduce a significant new discount on Fibre-to-the-Premises (FTTP) broadband lines for UK ISPs, which is expected to be finalised in time for a launch toward the end of the year (possibly around October).
Openreach are no stranger to running special offers on their fibre services, most of which tend to be designed to encourage ISPs to build stronger take-up in return for reductions on service rental and connection fees (example). On top of that we have the forthcoming launch of their new consumer focused 550Mbps and 1000Mbps tiers on 23rd March 2020 (Giganet recently revealed some retail prices for this, the first ISP to do so but with a location specific caveat – here).
At the same time the operator is under pressure to ensure that the products they offer are as competitive as possible (while keeping Ofcom’s regulatory whiskers happy), particularly with so many new alternative network (AltNet) ISPs entering the market – often alongside some quite aggressively low prices (i.e. intended to steal away some of Openreach and Virgin Media’s market share).
In response the operator is said by our sources to be designing a new special offer, albeit one with a focus toward driving not only take-up of FTTP but also the fastest tiers on that service. At present the exact details remain the subject of an on-going consultation and are by no means finalised.
Furthermore what they’re planning sounds fairly complicated (nothing new for Openreach) and that tends to make it more difficult for wholesalers to pass on the savings (i.e. big ISPs like Sky Broadband, TalkTalk and BT will see the main benefit), although much will depend upon the final details.
In simple terms, and assuming ISPs can meet the criteria, then they appear to be proposing rebates that are indirectly tied to the % split of bandwidth profiles. In other words if, for example, a higher % of orders are for 1Gbps then the provider may get a better discount than if they were predominantly selling the slower 115-220Mbps tiers (how ISPs position packages and upgrades for consumers will be important).
Officially the plans are still very hush hush and so far we’ve been unable to get a comment out of the operator, although the half-term holidays probably aren’t helping. However some of the details suggest that, in ideal circumstances, we might see the prices of Openreach’s new top tiers come down considerably (very close to the level of some commercial altnets).
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook and Linkedin.
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So in consumer terms you would be a mug to go into a 2 year contract for FTTP given prices could well be dropping by a 1/3rd or more by the end of the year. I imagine this is what TalkTalk are trying to negotiate to start now, hence why the delay to their FTTP rollout.
Luckily there are plenty of ISPs doing 12 month terms for FTTP.
2 year contracts with the market in such a state of flux weren’t potentially a good plan even before this suggestion that potentially maybe their might be a reduction that might not apply to you.
A 12 month contract per Marks reply takne out now however would be likely be ending by the time Openreach discount the charge and it filters down through the ISPs pricing to the customer.
Take a contract now, upgrade with the operator later when the 550/1000 are released. Job done.
Will the 550/1000Mbps packages be available across the whole OR network where FTTP exists already?
BT contrary to current Regs refuses to offer 12 month contracts and as suggested is ‘mugging’ renewers with 2 year contracts only.
@Jon A
Which current regs require an ISP to offer one year contracts? Quite a few ISPs now have two year terms, as do many mobile contracts. Of course there are plenty of others that don’t though so just shop around if what you are offered by one doesn’t meet your requirements.
@Jon A
There is no “regulation” that means BT or anyone else has to offer a 12 month option.
Doesn’t by guarantee you won’t ever pay more than a new customer?
Only if you have Halo
This is related to the what Openreach charge ISPs not what the ISPs charge customers. Normal competition will be there. This is about encouraging take up and possibly retaining certain ISPs. BT needs to retain revenue but also needs to remove legacy cost. In the same way it needs to eliminate ADSL in FTTC areas it also needs to get migration from copper in FTTP areas. By encouraging ISPs to up sell the OR margin increases marginally and provides an incentive to both the ISP and the customer.
And the price ISPs are able to offer is directly linked to the price it costs them to provide the service…
It’s obvious that it’s the point of this article….
I disagree the cost of the CP is the base cost and whilst this sets the lower limit ISPs have different back haul policies and overheads. The current broadband prices vary conciderably for what is basically the same OR product.
Volume discounts to larger ISPs acknowledged
Openreach don’t have volume discounts outside of the special offers advertised.
These prices are, of course, a key aspect that is outside of the control of CPs. If they want to reach most of the potential customer base they have to pay Openreach.
Should see this in focus when comparing products delivered via Openreach versus CityFibre.
CityFibre, etc, are Openreach’s competition after all. Virgin Media will join them if/when they wholesale.
If VM do wholesale for HFC also that would create a significant change to the dynamics of the market
OR really can’t compete directly with Cityfibre in the current urban and their 85% with their overheads. OR may be also considering differentiated pricing that more relates to cost.
@Meadmodj
The biggest disadvantage that City Fibre has is its very limited footprint compared to FTTP from Openreach, combined with pretty slow growth. That can be a lot of cost for an ISP to incur on its back office systems for a very modest benefit.
As an Openreach customer Vodafone will be participating in these discussions and receiving the briefings.
I doubt it’s a coincidence Vodafone did some price cutting at the higher end last week.
I have Zero hopes for anything and plan to start a campaign against BT openreach and Ofcom only because ofcom need to relax with the providers I’m in a rural home 3 miles from two different exchanges yet I’m sat here with 2 routers, two phone lines, both costing me £16.99 each and between them both on a good day I get 6mb between the two of them NOT each! The second line was fitted a 3 weeks ago and I can literally watch my new router drop out then 2 seconds later the first original line then goes down yet BT say it’s fixed to my provider and then it’s a run around getting it sorted and worst of all I am BLIND! I can not do Anything without broadband or a phone and we get next to no signal on mobiles. Which ofcom know about but ofcom need more authority over BT Openreach I’ve had openreach engineers tell me all sorts and make my life hell by getting in my face and pointing their finger at my chest and saying if I complain anymore they would leave me with just landline…with BT openreach in charge of lines we have to get them sorted
If this is both lines then basically you are probably at the limit of the physics. Good news is that whilst BT has no obligation to provide broadband ( only telephony ) this changes on 20th March so register for the USO. Any solution will be at least 10 and likely options for more
However surely when you ordered the second line the ISP gave you a speed estimate? Most ISPs are quite cautious now so it should have been clear that the second line would perform similarly.
I assume you have looked at 4G otherwise it is satellite only for now.
And as sympathetic as i am to your situation, it has nothing to do with the discounting of wholesale FTTP to CPs.
BT are the biggest rogues on the planet,i joined BT broadband last April they put me onto superfast fibre, i called them back i dont need superfast fibre as 38mbps is ample as i am 20yards from the exchange, they said its the best deal at £29 a month, broadband including line rental, well my monthly bills have increases month by month, the latest bill was January £60, i recently applied to Sky broadband, free phone calls including line rental £20 a month, BT found out and cut my line, restricting my service two days later cut my broadband off,
Will the 550/1000Mbps packages be available across the whole Openreach network where FTTP exists already?
Just been upgraded to FTTP on Openreach. Have had to use 4G all this time to get decent speed for internet. The VDSL/ADSL on the landline has been awful so far. If the DSL checker says up to 330, is that because of an artificial limitation and will the full whack of 1000 be available to all FTTP properties post March 2020?
Still seems odd that CityFibre and Vodafone can do 900Mbps for £40 a month. Even Hyperoptic did £46 for 1000. Surely Openreach have economies of scale so should be decimating the competition! It’s like Tesco unable to offer Champagne at a cheaper price than a local hardware store.
I feel for you buddy. I’ve found out this afternoon that BT placed me on a broadband package without my consent in Jan 19. and I’ve been on this for OVER A YEAR! Top this off I can’t negotiate with them even though I’m paying double for superfast 2 I’ve raised the issue with Ofcom and the ombudsman. I have the contract until June then it’s goodbye forever.
Apparently in the industry they call it “slamming” smh.
Sorry John I was replying to Nicolas. I pressed on the your reply button by mistake
Marty no problem. I have similar sentiments.
If anyone can help me on my question, I’d appreciate it.
I wonder what the upstream bandwidth will be like on the 500 and 1000Mbps tiers…
https://www.ispreview.co.uk/index.php/2019/09/openreach-prices-new-uk-consumer-550mbps-and-1gbps-fttp-tiers.html
500Mb down / 75Mb up
1000Mb down / 115Mb up
Sadly quite low as they’re ‘consumer’ tiers.
I dream of getting superfast broadband…
It’s not going to happen for me until the government realises rural areas need extra help because BT and its competitors just can’t afford to lay cable to remote hamlets and houses.
You can just upgrade your package which renews the cool off period which means you can leave for free.
Its got to be a massive bug for them that the vast (and I mean VAAAAST) majority of fttp customers take lower speeds. I.e 55/10 and 80/20. Partially because of the best deals being slanted toward them but more that the average user just doesn’t see the value in the higher tiers yet.
You’ve got to think that a lot of plotting goes on at BT and Openreach to try and get the public mindset not just behind pushing for for fttp rollout but also seeing value in actual fttp speeds.
Yes and no.
There is little point in marketing very high speeds until you can deliver them. Marketing wise you would piss off the have nots if you shout about gigabit.
Also there will need to be a detachment strategy from hybrid fibre so that differentiation can begin. I would expect the terminology around FTTC to change one ca 25% of homes are able to get FTTP.
I would also guess that saturation stats from providers – you were downloading XGB for Y hours last month and with our wizzfast connection it would have take Z seconds to download the lot – will come to the fore.
These are interesting times now. The packages can be shaped, largely, in software so will be much more responsive to consumer demand. Even moving from GPON (asymmetric) to XGSGPON (symmetric) isn’t the biggest deal in the world.