UPDATE2 Openreach (BT) Stops Taking New Customers for 18Mbps FTTC Trial

Openreach (BT) has informed participating ISPs that they’re “not planning further trials” of their 18Mbps (2Mbps upload) FTTC / VDSL2 “fibre broadband” product with new customers, although it will remain open to existing subscribers.. for now.

The special product tier has been in trial since last year (here) and was designed to act as an uplift path for existing ADSL (up to 8Mbps) and ADSL2+ (up to 20Mbps) based copper broadband lines, specifically those where current speeds are sub-10Mbps. It might also have come in handy for the forthcoming Long Reach VDSL (LR-VDSL) solution and the 10Mbps USO.

Today ADSL based connections are still used by a little over half of the country, including in many areas where faster FTTC (VDSL2) based “fibre broadband” services are now available. Nevertheless many people have found the higher price of FTTC products (ISPs tend to add a +£5-15 per month premium vs ADSL) to be off-putting, plus in a few areas FTTC speeds aren’t that much better than ADSL services (signal degradation etc.).

In response to that Openreach began to trial a cheaper 18Mbps tier that cost ISPs £4 +vat per month (the cheapest 40Mbps [2Mbps upload] tier is £6.90) at wholesale, which brings it a little closer to the cost of ADSL2+. The trial itself was recently extended until 30th October 2017 (here) and Sky Broadband has been busy testing it with up to 20,000 subscribers of their Sky Fibre Lite product (here).

Openreach Statement

We’ve published a briefing to inform CPs that we do not plan to continue testing the 18/2 Mbps product with new customers at this time.

Yesterday we asked Openreach whether or not the 18Mbps product tier was being shelved (EDIT: The response has been added below). However it’s possible that Ofcom’s recent move to force a significant cost reduction onto the operator’s 40Mbps (10Mbps upload) product may have something to do with it (here).

Under Ofcom’s plan the 40Mbps product, which currently costs £7.4 a month at wholesale, could drop in price to just £4.4 a month by 2020/21 and that would appear to challenge the model for Openreach’s proposed 18/2 tier as well as their existing 40/2 option (oddly Ofcom is only forcing their price control on the one product).

NOTE: Retail broadband prices are always higher than wholesale as ISPs need to add data capacity, service features and account for things like 20% VAT etc.

UPDATE 3:17pm

Openreach has responded to clarify that they will not do further trials for new customers, except in the Chelsea exchange where ISPs will be able to continue to use it (Chelsea is somewhat of a special case) and as previously mentioned all existing customers can remain on the tier.

The operator also said that their market research and trial experience to date did not support the business case for continuing with the 18/2 product trial for new customers. Openreach are also re-evaluating their strategy following Ofcom’s aforementioned proposals for FTTC pricing, which has led them to re-consider whether there’s room in the market for the tier.

UPDATE 10th May 2015

This is the official line that we can quote.

Q. Will new customers still be able to sign-up until 30th Oct or is the stoppage for them immediate?

With the exception of Chelsea exchange, our 18-2 product trial closed on 31st March. Yesterday we informed CPs that although existing customers can continue to use the product, we don’t plan to conduct further trials for new customers.

Q. Does this mean that the 18Mbps product is not going to be adopted after the trial ends?

Yes. The results of our trial and market research suggests there isn’t enough demand for the 18/2 Mbps product. We also need to consider the impact of Ofcom’s WLA proposals, which would leave little room in the market for such a product.