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BT Openreach Publish Tentative UK Wholesale Prices for G.fast Broadband

Friday, May 19th, 2017 (1:33 pm) - Score 9,375

How much will the next generation of 160-330Mbps based G.fast broadband technology cost to buy from your ISP in the United Kingdom? Today Openreach (BT) has given us a good indication by publishing their first Early Market Deployment (EMD) wholesale prices for the service and it looks affordable.

As present Openreach’s top 80Mbps (20Mbps upload) FTTC (VDSL2) based “fibre broadband” product costs about £49 +vat to Self-Install (PCP-Only) or £99 for a Managed Engineer Install with an ISP router and there’s an annual rental of £119.40 (equivalent to £9.95 a month). Meanwhile their 330Mbps (30Mbps) native fibre optic FTTP service is £92 for the connection (one-off) and £355.32 rental (£29.61 per month).

As usual these are the costs that Openreach charges ISPs, which come before providers have added their own costs for service delivery, VAT (20%), profit margins, data capacity and other bits in order to create the product you buy. For example, Sky Broadband charges about £43.99 inc. VAT per month for their unlimited ‘up to’ 76Mbps FTTC service and Plusnet will charge £37.98 for the same thing (includes line rental and excludes discounts).

However the commercial roll-out of BT’s next generation G.fast (ITU G.9700/9701) technology is expected to begin later this year (details here and here), which should reach 10 million premises by 2020 and possibly “most of the UK” (when combined with FTTP) by 2025. A large-scale pilot is already running.

gfast long openreach diagram

But how much will the new service cost? Openreach has today given us a solid idea by publishing their tentative Early Market Deployment (EMD) charges.

G.fast product 1
• A peak downstream rate of up to 330 Mbit/s.
• An upstream rate of up to 50 Mbit/s.
• £14.99 +vat per month

G.fast product 2
• A peak downstream rate of up to 160 Mbit/s.
• An upstream rate of up to 30 Mbit/s.
• £11.49 +vat per month

£99 for Managed Engineer Install with CP Device (Router) / £150 for Managed Engineer Install with Openreach Modem

The fact that the 160Mbps option is only a little bit above their top 80Mbps FTTC product should make it quite attractive, although don’t forget that ISPs will need to supply a lot more capacity in order to fuel this sort of connection and that will have an impact. Still it’s perhaps not impossible to expect a 160Mbps package that costs around £50-£60 inc. VAT per month (including line rental).

Openreach Statement

“Our Early Market Deployment prices are expected to be effective at the beginning of September 2017, subject to achieving the minimum order volumes in the current pilot, and will be valid until 31 March 2018.

The prices above are intended to give our CPs an indication of our G.Fast pricing plans at this point in time. We are unable to provide pricing details beyond the validity dates above given uncertainty over the outcomes of the Wholesale Local Access Market Review.

Changes to the Openreach Price List will be notified in due course once the start date of the Early Market Deployment phase is confirmed and a minimum 28-days’ notice will be provided.”

Ofcom’s current WLA market review, which has proposed to significantly slash Openreach’s 40Mbps (10Mbps upload) pricing (here), is an important factor in all this as it may also confirm the regulator’s approach to G.fast and whether or not the operator will be given another period of regulatory grace (Ofcom’s provisional proposal is more or less to leave G.fast alone).

On top of that BT has just begun a new review of their ultrafast broadband strategy, which is considering whether or not their current FTTP roll-out plan (aims to reach 2 million premises by 2020) could be extended to cover 10 million premises by around 2025. All of this will be playing on the operator’s mind and may influence their G.fast roll-out, which helps to reflect why today’s prices could change before launch (although they do look to have been pegged at a reasonable level).

As usual the challenge will be in encouraging consumers to pay the extra premium for G.fast, particularly given Ofcom’s plan to make Openreach’s 40Mbps tier a lot cheaper. The other obstacle is the same one that has plagued FTTC (VDSL2), which is the issue of headline speeds vs reality.

Signals sent over copper lines degrade over distance and G.fast’s performance falls away much more rapidly than VDSL2, which means that some people could be offered a speed well below 160Mbps. The fault thresholds that have been set by Openreach for G.fast may offer some additional insight (here).

Separately Openreach has also reduced some of their FTTC charges.

Openreach FTTC Changes

We’re pleased to announce the following price reductions to various GEA charges effective 1 July 2017:

* VLAN moves applied to GEA Cablelink Modify transactions reduced from £15.00 per move to £11.25 per move

* GEA Service cessation (any product variant) for FTTC, FVA and FTTP reduced from £5.37 to £0.00

* GEA Start of Stopped Line on FTTC reduced from £32.52 to £11.00

The change in the price of GEA Start of Stopped Line on FTTC will also impact some of the prices previously notified under ACCN OR493 Volume commitment special offer on GEA-FTTC 40/2, 40/10, 55/10 and 80/20Mbps speed tiers:

* GEA Start of Stopped Line as part of SIM Provide with GEA-FTTC 40/2 Mbps, 40/10 Mbps and 55/10 Mbps Tier 1 reduced from £12.50 to £0.00

* GEA Start of Stopped Line as part of SIM Provide with GEA-FTTC 40/2 Mbps, 40/10 Mbps and 55/10 Mbps Tier 2 reduced from £25.80 to £0.00

* GEA Start of Stopped Line as part of SIM Provide with GEA-FTTC 80/20 Mbps Tier 2 reduced from £20.85 to £0.00

UPDATE 3:48pm

Openreach has also announced the pricing for their comparable FTTP tiers (here).

Leave a Comment
15 Responses
  1. Avatar Steve Jones says:

    My feeling is that, with the reduction that Ofcom are forcing on the GEA-FTTC 40/10 service, that OR will reduce the 55/10 and 80/20 wholesale prices too – possibly by the same amount in order to keep the differential similar. That would open up a gap, but I can easily see the 160mbps service dropping to the current 80/20 GEA-FTTC price over the same three years.

    What is, perhaps, more interesting is to see if OR will maintain price parity with GEA-FTTP products. There is a good case to be made that if GEA-G.FAST is relatively cheap to provide compared to GEA-FTTP, that this is reflected in the price structure.

    1. Avatar Steve Jones says:

      Now I’ve checked it, there is, indeed, a price differential between the g.fast and fttp prices. For GEA-FTTP the (exc. VAT) rental for 160/30 and 330/50 are £12.75 and £29.61 per month respectively vs £11.99 and £14.99 for their g.fast equivalents. The former is a small difference, but the higher speed gea-fttp product seems disproportionately expensive, especially as the differences in underlying difference between the two for any given speed are essentially just fixed costs reflecting the difference in the deployment costs.

      So, in principle (unless it was added to line rental), there ought to be a largely fixed differential prices between FTTP and g.fast for any given speed if those are to be cost based.

      As far as differences in line rental between FTTP and MPF are concerned, I suspect hell will freeze over before Ofcom permitted that even if financial logic suggests otherwise.

  2. Avatar Brett Baker says:

    I have FTTP and are very happy with it, but the cost of the g.fast equivalent is so much cheaper, and they get 50mbps upload. Something not quite right here.

    1. Avatar Lee says:

      FTTP will be changing to 330/50.

    2. Avatar CarlT says:

      Where has it said that current FTTP customers will get 330/50 at the same price as their current packages or the G.fast price please, Lee?

    3. Avatar Lee says:

      Looks at the new pricing table here http://www.ispreview.co.uk/index.php/2017/05/openreach-introductory-pricing-160mbps-330mbps-fttp-broadband.html

      Clearly shows 160/30 and 330/50 which indicates Openreach will align the products.

  3. Avatar Richard says:

    This is all right up there with earnest discussions about designing a better horseshoe when the rest of the world has Teslas. I really do despair of this country.

    1. Avatar Lee says:

      Nothing stopping you getting on a plane a moving elsewhere.

  4. Avatar Darren says:

    50 Mbit/s upload is more like it. How many lines will be able to get it though, if my 300M D-Side mostly consisting of aluminium cannot support 50 Mbit/s I’ll be gutted.

    1. Avatar MikeW says:

      I think BT’s aim is to be able to get that 330/50 speed out to a range of 300m on ordinary copper. No idea about aluminium.

      But that aim depends on an amendment to the G.Fast specs that hasn’t made it into commercial silicon yet. Further complicated by trying to get vectoring to work with the high number of ports that BT demands; together, it seems beyond today’s hardware.

  5. Avatar Edward Sutton says:

    Am I being selfish by wanting 17 Meg and I am not in darkest depths of the UK… Come on Openreach finish the work for the rest of us. Then push out the next generation..

    1. Avatar RuralBroadband says:

      Same sentiments here, but no one who can make the difference for us cares, as we in the minority and it costs more for us to be treated the same as the other UK citizens.

    2. Avatar craski says:

      It is frustrating reading that those who already have a decent service will get even faster whilst there are still many millions of people stuck on slow ADSL lines but time marches on, we cant expect BT / Openreach to stand still they have to be working a long term plan.

  6. Avatar James says:

    SO when it says

    “GEA Service cessation (any product variant) for FTTC, FVA and FTTP reduced from £5.37 to £0.00”

    Does that mean the mongrels at BT charged me £35 to stop a line which cost them £5.37!? If so I am going to rob them of reward cards etc and terminate at every price rise!

    1. Avatar Lee says:

      No, that would have been the PSTN cease charge that Openreach levy.

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