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ISP Sky Broadband UK to Sell Openreach G.fast and FTTP Broadband

Monday, September 10th, 2018 (7:39 am) - Score 17,845
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After a period of uncertainty it’s today been revealed that Sky Broadband has done a new wholesale deal with Openreach (BT) to sell the operator’s range of “ultrafast broadband” (G.fast and FTTP) services on to UK customers, which will come at a hefty price discount of up to 40%. Sky now hope to double their customer base.

Over the past year we’ve remarked a few times that Sky Broadband’s strategy in the UK has appeared to be at a standstill, while many of their competitors have moved to build their own “full fibre” (FTTP/H) networks. Part of this has been due to the on-going bidding war for ownership of Sky plc by Comcast and Fox / Disney, which has yet to be officially resolved.

The fact that Sky’s CEO effectively ruled the company out of building their own Gigabit capable FTTP broadband network in 2016 has also set a certain tone (here), albeit an unusual one for what is still the United Kingdom’s second largest broadband ISP (c.6.2 million customers with c.60% still on their unbundled ADSL2+ lines and the rest taking superfast FTTC / VDSL2 via Openreach).

The good news is that Sky has finally made a decision on their immediate future and it involves throwing their support behind Openreach’s national infrastructure, as opposed to building away from it. The deal will involve a wholesale price reduction, which appears to be based off the new volume discount scheme that was launched in July 2018 (here).

We should point out that Openreach’s discount scheme is available to all ISPs – including small providers – that can grow their “fibre broadband” customer base on Openreach’s superfast or ultrafast network by an agreed proportion over a 3 or 5 year period.

According to The Telegraph, Sky are aiming to double their broadband base, but this may be wishful thinking in such a difficult market for traditional customer growth (Sky’s own broadband base has struggled to grow for the past year or so).

A Spokesperson for Sky said:

“Openreach’s deal, with lower wholesale pricing, enables us to accelerate take-up of ultrafast and full fibre broadband across the UK, while ensuring that competition at a network level remains strong.”

One other challenge in all this is the fact that Openreach’s 330Mbps capable hybrid fibre G.fast network and their 1000Mbps full fibre FTTP service are still in their infancy. BT Group reported last month (here) that G.fast has so far covered 1,117,000 premises, while their FTTP rollout had reached 631,000 premises.

Openreach’s current plan envisages G.fast reaching coverage of about 5.7 million premises and FTTP delivering to 3 million premises by 2020, although their full fibre network should eventually reach 10 million by around 2025 if everything goes as planned. Under this strategy Openreach will definitely have the largest FTTP network in the UK and so Sky’s move makes sense.

On the other hand the issue of price could prove to be a headache for Sky, even with the proposed discounts. Many of their rivals are now building alternative FTTP networks and some of those are already offering or planning to offer related services at an aggressively reduced price point (e.g. we expect Vodafone / Cityfibre to do this and Hyperoptic already do the same). Matching this on Openreach’s network would be difficult.

The newspaper article further hints that Sky may not pass the wholesale discounts on to customers due to marketing spend and the extra investment needed to support new network capacity / support systems, which may further weaken their ability to challenge. The key advantage they have though is that Openreach has the scale to build faster, much faster, than their rivals.

This might not quite be the co-funding arrangement that Openreach was hoping for but having the country’s second largest broadband ISP put some weight behind their FTTP/G.fast solutions is still an important development. The race is on and we now await details on the first Sky Ultrafast Broadband packages, which we already know will be supported by a new wireless router.

UPDATE 10:54am

We did ask Sky whether they had a rough ETA for when the new packages would launch but received a “no comment” response.

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Mark Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he is also the founder of ISPreview since 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
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22 Responses
  1. Andy Mitchell

    Just a shame that the idiots at OpenReach decided to scale back the G.fast rollout in favour of FTTP. Perfect for people like myself in a block of flats that cannot get FTTP. And my box was on the upgrade list originally but not anymore…

    • Salek

      Overall I think cutting back GFAST is a good idea, will let them concentrate on FTTP, you can probably look at other technologies such as 5G in the near future with CAT 12 phones now cheap as ever 300-400 mbits should be possible in many places,

    • Meadmodj

      Investment plans of large companies are simply based on commercials not individual premises needs. Openreach have come under heavy criticism for the late and over hyped G.fast based at the cabinet (particularly on this site). With the fall in Fibre costs, the future return and the political pressure for Fibre has finally swung it to FTTP. This announcement is good for both Sky and BT as G.fast and FTTP can have more guaranteed performance. BT can also recoup their G.fast cabinet investment.
      However I still haven’t given up hope that Openreach will review their access options and that FTTP rollouts will include ultrafast FTTB options based on G.fast technologies where cabling will be difficult.

    • Jonny

      If you’re in a block and can do the work to get people interested then it’s highly likely that Hyperoptic will serve you.

    • Fastman

      andy you could co fund a internal cab in your basement with a GFAST card should you wish via community funded programme — with Openreach

  2. Sky

    I thought Openreach cut back on G.FAST and concentrate on FTTP more. I think Sky are mistake to agreed with G.Fast (useless technology still on copper)

  3. Paul W

    5g will be no good for gaming thought right? So a cabled connection such as fttp or fttc would still be the go to for gaming and not 5g,unless I’m mistaken and the ping etc will be good.

    • In theory 5G latency should be perfect for multiplayer gaming, heck even most modern 4G services do a pretty good job on latency. A bigger issue is cost vs data allowance, since fixed lines are much better for unlimited usage plans. But this is a discussion for another topic.

    • Paul W

      Oh, OK mark, thanks for the info, didn’t realise it was going to be that good.

    • Some of the test networks are delivering sub-5ms latency times, which is similar to fixed line full fibre networks. Obviously figures will rise once you add in additional server hops and local network delays but it’s a big improvement over 4G and should also be more stable.

    • Mike

      I’ve had no issues gaming over 4G, with an antenna it makes it much more stable, 50ms ping to UK servers on average.

  4. Gary Hilton

    If people are so keen on gfast with its tiny area of effect, petition Open reach and see if they will install it for you. Paying for it myself is my only option if I want fttp to get me off sub 1.5 Meg adsl. Sorry but personally I have zero support for gfast expenditure from Open reach until they manage to provide acceptable broadband to the 100s of areas still living with apalling standard connections

    • Fastman

      you could co fund a internal cab in your basement with a GFAST card should you wish via community funded programme — with Openreach

  5. Cdg

    It’s about time another major provider offered open reaches Fttp, will look to switch from bt ultrafast 2 when my contract runs out. Paying £59.99 at the minute but I imagine sky will be around the same price including the basic sky q package

  6. Robin

    Are sky likely to offer or support customers wanting FTTPoD as fully FTTPoD isn’t currently available in my area.

    • Jonny

      I would be very surprised if Sky were willing to spend the staff hours that FTTPoD orders require for a product that might have single-digit sales each month.

      FTTPoD in its current form isn’t something that I can see having anything other than very narrow appeal.

  7. Gary Hilton

    Hopefully Robert, the choice right now is very limited, have to wonder when even BT Internet don’t offer it!

  8. NGA for all

    This is good to see. More volume for FTTP and some retail competition.

  9. Jim Booth

    Think it’s a bad move for Sky Openreach can’t cope with the standard installations as it is due to Engineer shortages so how will this be any good when you will never be able to get it installed. Sky should backtrack sack off this useless Openreach lot and spend some of their profit billions to lay their own network.

    • Fastman

      crazy you clearly have no understanding of how much it costs to build and maintain a network

      actually openreach is significantly recruiting engineers at present

      but lets not fact ruin a good moan

  10. Alfiescruff

    When will Sky start offering FTTP?

    Will you be able to detach the need to order a line rental as there would be no need for a copper line if you take a VOIP service?

  11. walkerx

    Our cabinet has had 330 FTTP on demand available for months as shows as available now, yet when check with BT if can get it, it reports not available in your area as yet.

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