ISP Plusnet Expand UK Low Cost Areas to More Broadband Users

A sizeable portion of Plusnet’s broadband ISP subscriber base has recently been informed that they will benefit from a good reduction in the price of their service. The move comes after the provider decided to implement a wider definition for ‘Low Cost Areas‘ on their network.

At present their customers pay less for the service if they live in a “Low Cost Area“, which is reflective of Ofcom’s UK telecoms market definitions. Customers considered to be outside of this area could end up paying significantly more for the same service, which is an approach that we’ve seen other ISPs adopt too (some of them don’t make this obvious until you try to sign-up).

For example, Plusnet charges £9.99 for a 17Mbps unlimited broadband (excluding line rental) service in a “Low Cost Area” but if you live outside of this then that rises to £17.49 a month (quite a big jump). Likewise a 38Mbps FTTC service costs £14.99 a month in “Low Cost Areas” and £22.49 everywhere else.

What is a Low Cost Area?

Ofcom’s current regulatory model tends to filter each part of the United Kingdom into three categories (markets). This helps to define which areas need more regulation to protect consumers (Market A) and which can benefit from softer regulation due to strong competition (Market B). The third market is Hull and that is largely KCOM’s patch.

At present about 90% of the UK is Market B (the “Low Cost Area“), which means you have more choice of primary operators, less regulation and are probably on a modern exchange with more affordable capacity. By comparison Market A (9.5% of UK premises) tends to reflect the most rural or digitally isolated areas, which may suffer due to a lack of competition (e.g. only BT) and cost more to serve.

So what’s changed? In 2017 the regulator proposed to update their market definitions, which is necessary because a lot has changed since the last revision in 2014. Over the past 3-4 years we’ve seen unbundled (LLU) platforms, such as those from Sky Broadband, Vodafone and TalkTalk, expand their coverage. Likewise alternative network (AltNet) ISPs, such as Gigaclear, have also grown their reach.

As a result fewer people now live in the more expensive Market A areas.

Proposed UK Market Definitions (2017)

Market A (2.0% of premises)
Areas in the UK where there is limited or no network competition (exchange areas which are BT-only or BT + one other primary operator).

Market B (97.3% of premises)
Areas in the UK where there is reasonable network competition (exchange areas which are at least BT + two other primary operators).

Hull Area
Covers 0.7% of UK premises, where KCOM is the only significant provider.

Sadly Ofcom has quietly delayed their final statement on this proposal until summer 2018 but happily Plusnet has decided not to wait. Instead the ISP recently began adopting the new definitions, which is something that affected subscribers will welcome because it means a big price cut.

A Spokesperson for Plusnet told ISPreview.co.uk:

“We always want to do the very best for our customers and took the decision to make the changes ahead of Ofcom’s final statement being issued.”

Obviously anybody already in a Market B area will not see any change.