Openreach Discount FTTP Broadband Prices in UK Fibre First Cities

Openreach has launched a new localised marketing promotion for UK ISPs, which offers discounts on the monthly rental and one-off connection costs of their ultrafast Fibre-to-the-Premises (FTTP) service in a maximum of four conurbations (i.e. Fibre First cities with a limited footprint from 10,000 and up to 500,000 premises).

Under this scheme ISPs are encouraged to carry out local marketing of their consumer FTTP packages in the cities they intend to target. In return they may benefit from a free connection (or a reduction of 50% on the standard charge), which usually attracts a £97.03 +vat one-off cost. A significant reduction to monthly rentals has also been offered (see further below).

Admittedly there are some other caveats, such as in terms of needing to meet a certain “trigger point” (e.g. the date that FTTP becomes ready for service), as well as adopting suitable GEA Cablelink (capacity) products to supply capacity for the service and ensuring a minimum Average Revenue Per User (ARPU) of £16.28 across the offer term.

The move thus seems likely to benefit bigger providers that can spend a bit more on local marketing exercises, although Openreach doesn’t appear to have set a clear threshold on related activity. The biggest prize here is likely to be the rental discounts as those are the ones that consumers tend to notice the most.

Just as a quick comparison, Openreach’s 220Mbps (30Mbps upload) tier normally attracts an annual rental of £255.36 +vat and their new 1000Mbps consumer tier, which isn’t even due to go live until 23rd March 2020, normally costs £375.36 +vat. And no, it’s not a mistake that every tier from 80Mbps to 220Mbps carries the same price (they seem to be pushing the faster tiers).

As usual we must caveat that these are wholesale charges and thus do not include all of the many other elements that an ISP has to add, which is necessary in order to create the retail price that you will ultimately have to pay (e.g. 20% VAT, profit margin, capacity, service / network features etc.).

Openreach currently aims to cover 4 million UK premises (homes and businesses) with their new FTTP network by March 2021 and then 15 million by around 2025 (latest rollout update). In that sense anything that gives ISPs an extra opportunity to make such services look attractive is to be welcomed, even if this one does seem to include quite a few caveats.