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ISP Plusnet Expand UK Low Cost Areas to More Broadband Users

Saturday, May 5th, 2018 (12:01 am) - Score 5,643

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.

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By Mark Jackson
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 Twitter, , Facebook and Linkedin.
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16 Responses
  1. Chris P says:

    So likely the smaller communities that have finally had LLU will see price drops due to re classification. That’ll be popular. But will they be lower on the list now for fttp now as the LLU lot want a return on their Ofcom encouraged investments?

    While I’m in favour of slightly more expensive broadband charges across the board to encourage fttp deployment, stiff LLU competition with its lower costs will not help.

    It will be interesting to see if the reclassified to market b areas get over built by altnets.

    In conclusion there is no price reduction for the majority of us already in market B areas, just those reclassified from A to B will see a price drop. I wonder why OFCOM don’t reclassify an area as soon as they get more than bt + 2 other providers? That would surely be in consumers interests or did Ofcom want to help LLU providers , on the sly, by enabling them to charge more until reclassification? Maybe they can take that approach with fttp?

    1. MikeW says:

      Hit the nail on the head.

      There is no incentive coming from the LLU boys to remove copper, so expect less likelihood of full fibre. And the reason prices aren’t dropped immediately is to trigger some business for them, so they get an ROI.

      However, IIRC, the bulk of the improvement here comes from the fact that Ofcom finally started to use the presence of FTTC within the market A areas, not new LLU.

  2. Simon says:

    Just left them due to another price rise

    good riddence

    1. Web Dude says:

      I just changed to line rental and FTTC with PN, and still happy with them after using them (almost continuously – keeping my account open while I had no landline when I moved home) since 2003.

      I’m quite happy with them, but YMMV.

    2. Web Dude says:

      I found it to be swings and roundabouts…

      The price increase will be 1p for me, as the Caller Display fee is being scrapped early (rather than October, when none of the telecom firms will be able to charge for it).

  3. Meaury says:

    Maybe that’s why Plusnet are increasing their standard broadband price to £10.99 this month. They are not giving anything away. Just rearranging the goal posts.

  4. Meadmodj says:

    ISPs reducing prices (or not raising them) for existing customers is normally offered on the basis of a new contract. The market remains very competitive and for most of us we would not know whether the provider is using their own network elements or piggy backing on Openreach. So unless you have a specific need for a particular ISP and are out of contract just look out for the offers, any freebies, keep your contract as short as possible and proactively consider the next provider before the notice period of your current ISP contract.

  5. Meaury says:

    That’s all well and good except there’s no competition for broadband only services.

  6. Meadmodj says:

    I understood ISPs like Zen were no frills broadband only.
    For those utilising Openreach they all pay the same for a given product and the providers have a choice of service level to request. They then have to arrange the backhaul and Internet connectivity. They therefore all work within the margins of what they are paying Openreach, their internal costs and the price they fix. Many bundle low cost items just so they have something to differentiate. Some choose to have localised pricing and others like BT national pricing.
    The only real competition in the market currently is BT and Virgin Media. BT sets its pricing and then the parasite ISPs set theirs accordingly, lower enough to gain sales without affecting profit margins. It’s called charging what the market will stand. So all we can do is box clever in the complexity that they create.

  7. domb says:

    Always considered the difference in charging between Market A/B imposed by ISP who do not use their own LLU network or alternative back-haul providers a little unreasonable (such as plus.net). Different pricing for 20CN/21CN is reasonable based on wholesale cost of the BTw services. I cannot see how providers such as plus.net who charge extra for Market A exchanges which do have 21CN WBC can be justified. 20CN fair enough.

    1. Web Dude says:

      Think you have it ‘upside down’ – PN is the only one which passes on the lower cost forced on Openreach/ BTw by OFCOM. Other ISPs don’t pass on the lower cost.

  8. Angry Man says:

    Would be great if their service ACTUALLY WORKED!! I have never been more stressed out by an internet service provider. Oh they say, it’s a problem on the line they say… Yeah? Well that’s funny as aside of the cost we NEVER had ANY issues with Virgin…

    1. Chris P says:

      Virgin use a completely separate line and infrastructure than plus net would.

    2. UK Should be ashamed at their broadband infrastructure says:

      That’s why virgin should expand their network even more so. Would attract more customers and bring in more competition.

    3. Chris P says:

      After all these years and take over by the US global cable tv & broadband giant Liberty Global with thousands and staff and international operations I wonder why they haven’t done exactly that?

  9. Ultrafast Dream says:

    So in a nutshell are PN kicking those in the danglies that are restricted by no access to competitive broadband owing to no LLU? The likelihood is that those customers will also be on a crap ADSL service with no access to Fibre! Well done PN, why not rub salt into the already very sore wound!

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