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Openreach Cuts UK ISP Wholesale Prices for FTTP Ultrafast Broadband

Monday, July 22nd, 2019 (1:22 pm) - Score 11,896
telegraph_pole_engineers_fttp_openreach_2019

Openreach (BT) has today announced that they’re cutting the wholesale prices of their Fibre-to-the-Premises (FTTP) ultrafast broadband lines from 1st September 2019, which is intended to help encourage take-up of the new service by ISPs (provided Ofcom approve their proposed changes, which they probably will).

The move is designed to support the operator’s on-going work to cover 4 million premises (homes and businesses) with “full fibreFTTP across the United Kingdom by March 2021, which could be extended to 15 million by around 2025 and they may even go beyond that if the conditions are right (e.g. easier wayleave agreements, extension to the business rates holiday etc.).

So far around 1.5 million premises have already been reached and their rollout is continuing to ramp-up (currently passing 20,000 homes and businesses every week), although so far neither TalkTalk nor Sky Broadband have begun to sell the service (although they are planning to launch related packages in the very near future). Aside from BT, most of the other FTTP offering Openreach ISPs are smaller players.

Meanwhile Openreach is facing aggressive competition from smaller Alternative Network ISPs (e.g. Cityfibre / Vodafone, Hyperoptic, B4RN, Community Fibre etc.), which are often able to offer ultrafast broadband speeds at significantly lower prices (partly due to the advantages of not being impeded by a legacy of regulation). Not to mention Virgin Media’s ever expanding and soon to be Gigabit speed network.

Realistically the operator may struggle to match the pricing of their more nimble competitors but they have at least today moved to make their own services more attractive and, unlike previous promotions, this does not require a volume commitment by ISPs. Providers can expect a 36% reduction on 330Mbps tiers, a 20% fall on their 110Mbps product and a 10% reduction on their 40Mbps tier.

openreach_fttp_pricing_2019

As usual we must stress that these are wholesale prices and you will always pay a fair bit more at retail, not least because ISPs have to add the cost of delivering their own services to you as well as network capacity / features, 20% VAT and a profit margin on top etc.

Openreach also plans to introduce new 500Mbps and 1Gbps variants of its FTTP service later in the financial year 2019/20 (shown above), with lower upload speeds and pricing aimed at attracting consumers (inc. home workers). At present the existing pricing for 500Mbps and 1Gbps is aimed at SME business users (details) and so tends to be a fair bit more expensive (particularly given the £500 one-off connection fee on those two tiers).

The pricing for the new consumer 500Mbps and 1Gbps tiers is still being determined and so at present Openreach is not yet ready to confirm the details.

Katie Milligan, ORs MD for Customer, Commercial and Propositions, said:

“We’re making great progress on our full fibre build programme and our discussions with customers about upgrading the country have been encouraging so far. Naturally pricing is fundamental to that shift and we want to give our wholesale customers the confidence to invest at scale in their own full fibre products and services using our network. To do that, we’re offering them a greater incentive to switch their customers to a full fibre world, with more competitive pricing and a wider choice of products.

These price changes are a win/win for Communications Providers, their customers and Openreach. We believe they will encourage the UK’s homes and businesses to experience the benefits of faster and more reliable broadband. We hope they’ll incentivise our wholesale customers to consider the longer-term benefits of upgrading more of their customers to ultrafast Fibre to the Premises technology, particularly their customers who are currently using superfast Fibre to the Cabinet services.

At Openreach, we know that upgrading people onto future proofed full fibre broadband will keep the UK at the forefront of the global digital economy – boosting productivity, growth and prosperity. We want to start reaping those benefits now, so we’re encouraging providers, homes and businesses to make the switch to FTTP wherever it’s available and sooner rather than later.”

Clearly one of the most interesting changes is on their 330Mbps tier, which has seen the sharpest price reduction and that should help to make it much more competitive. Once again though it will be up to the ISPs to decide whether or not to pass these savings on to consumers but most probably will as it’s not a very competitive market.

Finally, we should point out that Openreach are also quietly preparing to trial a new range of symmetric speed 1Gbps and 550Mbps packages, which is something we leaked last month (here). Given today’s news it seems reasonable to assume that this is what the operator means when they talk above about “further business grade ultrafast variants” being “under consideration.”

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Mark Jackson
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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37 Responses
  1. Avatar Sky

    Sky are useless and often very slow to release of when?

  2. Avatar CarlT

    Mmm bandwidth.

  3. Avatar AnotherTim

    OpenReach are facing increasing competition at least in part because everyone is building networks in the same places, while areas with no superfast broadband are left behind. And as prices fall the remaining areas become increasingly less viable…

    • The balance here is that you also increase take-up, since there’s no point in rolling out such a network if its priced so high that your customers just pick the alternative network instead.

    • Avatar CarlT

      I’m not sure I get the point here? What’s the overarching message of the post?

    • Avatar AnotherTim

      My point is that lower prices actually disadvantage anyone in an area without a superfast option, as falling returns on investment make the remaining areas even less attractive commercially. And as more and more overbuilds happen, the price wars will only increase as ISPs fight for market share.

    • Avatar A_Builder

      @AnotherTim

      Or maybe the point is that as the cost per premises passed has dropped so has the price point to hit ROI.

      Ok this pencil sharpening is driven by competition and having to report to investors that certain targets are hit. Driving down costs is good for all FTTP deployment.

      Copper switch off is a high priority at BT central. And this makes sense. Yes, as with all human endeavour there is a long tail issue with the most difficult cases. Rural FTTP is still happening but not with the acceleration that urban has recently had.

      I’m not sure I would be so negative particularly now there is increasing political noise on getting to 100% FTTP. Now I don’t really believe we will ever see 100% FTTP as microwave and other decent tech can do a more than adequate job. However, there is a certain neatness about not using high maintenance energy gobbling alternatives to FTTP.

    • Avatar CarlT

      Regulator could always allow Openreach to charge more in edge cases. I’m sure that’d help the business case.

    • Avatar A_Builder

      @CarlT

      “Regulator could always allow Openreach to charge more in edge cases. I’m sure that’d help the business case.”

      Well it would but that would undermine the rather dramatic shift in funding etc for FTTP that is occurring thorough the market throwing money at the solution and costs coming down at the same time. Nobody is going to mess with the accelerated rate of FTTP deployments that is going on with very little state cash.

      This may well be why VM want a separate rural entity in that they can then charge what they like to provide connectivity at ROI – they won’t be bound by the usual VM tarifs.

  4. Avatar Joe

    110/15 priced same as 80/10. Sounds like potential for a ‘free’ upgrade down the line 🙂 Wonder if BT will actively push it like they did with 40/10->80/20

  5. Avatar Mart

    You need good upstream speed for Facebook to collect your data. (and Microsoft and Google!)

  6. Avatar NE555

    OR have had a long-standing “special offer” promotion on FTTP 330/50, which is not volume linked AFAICS – it’s 8.4.22 from their pricelist.

    https://www.openreach.co.uk/orpg/home/products/pricing/loadProductPriceDetails.do?data=0t9UkBhk8YLYdBOkMT1ko%2BJM0b4GCV4RbCNCgNwBhp1QbovfA25dkZY9OhDK4oNde6YShZ82RgLOGLsH2e9%2Bmw%3D%3D

    (Works out at £25.39 per month). So this new price is very welcome, but mainly just cements the special offer, reducing it slightly.

    • Avatar Jack

      I’ll say some ISPs will start to offer the 330/50 package for £39-£42 a month within the next 4 months

    • Avatar NE555

      It will also be interesting to see if SOGEA pricing for FTTC is updated too.

      Right now the pilot pricing for 40/10 is £12.96 per month, meaning that FTTC is still cheaper than FTTP in FTTP areas – and that will push CPs to continue selling FTTC even if FTTP is available.

  7. Avatar Marty

    I wonder with FTTP ramping up we might see a new tier of 500mbps for residents as well in the near future as competition to Virgin media from other isp’s.

  8. Avatar Mark

    Does anyone know if FTTC will ever get faster speeds? ADSL used to have a maximum speed of 8Mb and then with new technologies that increased to 24Mb max. At present, the max is 80/20 on FTTC but with new technologies, could they maybe launch VDSL2 or VDSL2+

    • Avatar AnotherTim

      Do you mean something like Gfast?

    • Avatar cdh1981

      FTTC is already VDSL2. I doubt much further work will be done much on FTTC, save for maybe replacing ECI plant with Huawei plant (if the trial shows this to be sustainable/economic) which may bring an improvement for some users. All eyes seem to be focussing on full fibre to the premises and/or 5G. BT will retire the copper network at some stage, so fibre will probably the only option at some stage for the majority.

    • Avatar Joe

      You can hit 100m on fttc but they won’t do it. Not worth the hastle now with g.fast and fttp.

    • Avatar A_Builder

      @Mark

      Yes, FTTC can be upgraded to 200/200 by changing from the existing 17MHz profile to a 35MHz profile (17b -> 35a).

      In most of the non ECI DSLAMs this is a line card swap.

      It is very possible only OR have shown no interest so far in this technology that would double available real world speeds for 50% of FTTC users.

      Because of a variety of very odd deployment decisions that were made by OR at the beginning of FTTC deployment it isn’t as easy as it should be and would mean new modem/routers all round.

  9. Avatar Jed

    @Mark Jackson, do you have any insight if/when BT will offer the 500/1000 speeds as per above list?
    I have 330/50 Ultrafast 2 at present, and my exchange is 1000/220 enabled.

    Looking at the price drops it might just work out the same BT price for 500/75 as I pay now

    • I’d say we’ll know by the end of this year at the latest but a solid timeline is not yet clear. I know some consumer ISPs are expecting it before Christmas so we’ll see.

  10. Avatar Chipmunk

    Wouldn’t say no to 550mbit, as long as it’s a decent price cut on current.

    Guessing 1000mbit will still be silly expensive, given the upstream upgrades it necessitates.

    • Avatar Jed

      Here’s my prediction (for BT Ultrafast 3&4), doing a simple extrapolation on the new wholesale prices:-

      Before / After

      330 – 59 / 38
      550 – N/A / 59
      1000 – N/A / 115

      Let’s see 😀

    • Avatar Jack

      More like £40-£49 since the pricing excludes VAT.

  11. Avatar Paul Green

    @Another Tim.

    I agree.

    However, it isn’t surprising really, Openreach really are the shower of shit they appear to be.

    I have now been waiting over 8 weeks for a quotation on install costs via my provider a leased line for my business and they cant even get that sorted.

  12. Avatar Jed

    Actually looking at the Openreach site, current 500 and 100 wholesale is £55 and £80 respectively. Using a linear calculation based on 220 & 330 new wholesale price. BT Retail might be close to £55 and £80 Respectively (same as current wholesale)

    That would be nice 🙂

  13. Avatar Gregory

    Could mark tell me why does bt not offer the 110mb download as a package as it is clearly available from openreach with fttp

  14. Avatar Ryan Spooner

    “with lower upload speeds and pricing aimed at attracting consumers”

    Why do these luddites think that consumers don’t need or want higher upload speeds? Content producers are now very common, as are households containing 4, 5, 6 or more people all competing for bandwidth.

  15. Avatar Clive C

    I see Open reach have delayed their July update to the ‘Fibre First’ info until later this month….. given there is just one day left of this month hopefully tomorrow then1

  16. Avatar Victoria

    Did the wholesale prices drop on 1st September? Doesn’t look like any providers dropped their package prices…

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