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Openreach Offer FTTP Broadband Discounts to Boost Take-up

Tuesday, December 3rd, 2019 (4:31 pm) - Score 3,288

Openreach (BT) has launched new discounts on their 1Gbps capable Fibre-to-the-Premises (FTTP) broadband network in UK “Fibre First” cities and towns, which will start on 1st January 2020 and seem designed to encourage ISPs to build stronger take-up in return for reductions on service rental and connection fees.

The network access provider currently aims to cover 4 million UK premises (homes and businesses) with their new “full fibre” network by March 2021 (so far they’ve done about 1.9 million) and then there’s an ambition to reach 15 million by around 2025 (latest rollout update). As part that there’s a strong desire to build take-up among consumers and so some new performance based discounts have been developed.

The new approach appears to complement similar proposals for a more localised discount last month (here), although this new offer is more widely available and has different eligibility criteria. The new connection and rental discounts will also be available on all premises that are declared as Ready for Service (RFS) on or before 31st March 2021 2020 (i.e. those deployed under the commercial Fibre First rollout).

The special offer itself will start on 1st January 2020 and will then be open to participation for 12 months. On top of that ISPs will be eligible for free bandwidth modification when upgrading to higher speeds, until 30th September 2022, and there’s further flexibility during the first 6 months of the offer (see OR’s briefing for more).

OR Briefing Statement

In order to be eligible for discounts [ISPs] must commit to (i) achieving a high target of FTTP new provides as a percentage of total new provides in the footprint. In months 1 to 9 from the start of the offer, the FTTP target is 70%, increasing to 85% in months 10, 11, and 12, and 90% thereafter until the end of the offer (ii) having GEA Cablelinks in place or on order in the areas they plan to consume Openreach FTTP.

Aside from the possibility of a free connection, we note that annual rental charges will also be reduced on their FTTP Data Variant (no copper phone line required), although these are a little bit different from the previously proposed discounts last month (discounted prices for the 160Mbps and 220Mbps tiers have risen a little).

Variant From Until Annual Rental
Up to 80Mbit/s / 20Mbit/s 01/01/2020 30/09/2022 195.36
Up to 115Mbit/s / 20Mbit/s 23/03/2020 30/09/2022 195.36
Up to 160Mbit/s / 30Mbit/s 01/01/2020 30/09/2022 207.36
Up to 220Mbit/s / 30Mbit/s 23/03/2020 30/09/2022 219.36
Up to 330Mbit/s / 50Mbit/s 01/01/2020 30/09/2022 255.36
Up to 550Mbit/s / 75Mbit/s 23/03/2020 30/09/2022 255.36
Up to 1000Mbit/s / 115Mbit/s 23/03/2020 30/09/2022 291.36

Just for comparison, Openreach’s 220Mbps (30Mbps upload) tier normally attracts an annual rental of £255.36 +vat and their new 1000Mbps consumer tier, which due to go live until 2020, normally costs £375.36 +vat. Likewise it’s not a mistake that the two slowest tiers carry the same price (they seem to be pushing take-up toward the faster tiers).

Otherwise the usual caveat applies in 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 at retail (e.g. 20% VAT, profit margin, capacity, service / network features etc.).

UPDATE:

Small correction. On the original briefing it incorrectly stated that the discounts will also be available on all premises that are declared as Ready for Service (RFS) on or before 31st March 2021, although Openreach has now corrected this to March 2020, which makes much more sense.

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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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18 Responses
  1. Avatar JmJohnson

    Wow… like no-one could foresee that overbuild would lead to Infrastructure owners slashing prices to encourage take-up.
    A smaller return of investment which then reflects on the economic viability of less dense areas… ignoring the fact that there wouldn’t be overbuild and so uptake would be higher without the need to slash prices.
    It’s almost like these management teams have forgotten the core concepts of supply and demand.

    • Avatar A_Builder

      Not really – the price drops will have been factored in anyway.

      In any case OR will have to drop their FTTP prices in any area where CF or Hyper are active to be competitive. And they will have known that. The mystery is why they held them at the higher level for soooo long.

      The golden egg at the end of this is stop wasting time fixing copper faults. The egg is only delivered once meaningful numbers migrate to FTTP. Any OR want meaningful numbers on their network ASAP as human laziness then takes over and they get to retain on their new shiny network.

      At least FTTP is now a real thing and market forces will keep OR’s pricing sensible as they don’t want to vacate all of the big urban areas to Alt Nets. So I am optimistic.

    • Avatar AnotherTim

      Market forces may keep OR’s pricing sensible in overbuilt urban areas, but the same forces will keep prices high in rural monopolies. Living in a rural backwater, I’m not optimistic.

    • Avatar AnotherTim

      As a follow-up on market forces, I see from another story toob are offering 900Mbps business broadband for £50+VATpm in Portsmouth, while in rural areas Gigaclear are offering a similar service at the (currently discounted) price of £358.20+VATpm.

    • Avatar CarlT

      Anyone would think there is a difference between spending £400 per premises passed using PIA in urban areas and spending £2000 per premises passed in rural areas.

      This ignoring that toob pricing seems to be very, err, aggressive.

      Market forces indeed. Openreach are required to subsidise rural pricing through charging more in urban areas, others not so much.

      That said, just to point out all the premises with FTTP are covered by these discounts, including those in rural areas.

      It’s only very recently that Openreach FTTP coverage in urban areas overtook rural as a proportion of total premises.

    • Avatar AnotherTim

      In most of the rural areas that Gigaclear has built the difference in build costs are covered by BDUK – the running costs will still be higher, but I’m guessing not 7 times higher.

    • Avatar CarlT

      No, they aren’t. Gigaclear committed something like £1.3k per premises passed alongside subsidy and have gone over budget and are behind schedule.

      The budget for their commercial rollout is about quadruple that per premises passed of urban deployments.

      See https://www.ispreview.co.uk/index.php/2019/03/no-gigaclear-deal-yet-but-devon-and-somerset-get-extension-to-2023.html for example – £60.5 million from Gigaclear for less than 48,000 subsidised premises alongside £67.3 million for 43,000 commercial premises.

      Then look at things like https://www.ispreview.co.uk/index.php/2019/06/rural-isp-gigaclear-ends-2018-with-93000-full-fibre-uk-premises.html for how behind schedule and over budget these are.

      With so few premises operational £3.8 million in fines for failed reinstatements, etc, doesn’t help.

      Either way Gigaclear charge what they can and have to to recover their investment. Sorry that can’t cross-subsidise with revenue from charging urban areas more than they’d otherwise need to.

    • Avatar AnotherTim

      I think you are making my point that market forces will ensure rural broadband is very expensive (where it is even available).
      Even if it costs Gigaclear £1000 more (after BDUK subsidy) to connect a rural business than a similar urban business, it will only take 3 or 4 months to recoup the difference for a 900Mbps service (at the currently discounted price).

    • Avatar CarlT

      Perhaps compare like for like rather than a company trying to make money with one loss-leading to try and gain take-up.

      Any idea what performance level toob promise? £50 a month won’t pay for a gigabit of transit.

      Obviously if you’re upset with market forces like this there’s always the option to move to a more built-up area where the market forces are more favourable. It’s strongly a buyers’ market at the moment as far as housing goes and there’s bound to be someone wanting to live in the arse end of nowhere so that they can constantly whinge about not getting the benefits of living in a city while enjoying the benefits of living in a rural area you can trade with.

      Maybe even as a bonus they’ll be constantly whinging both about services being uneven due to market forces and indeed services not being subsidised by the taxpayer in a timely fashion.

      Give it a rest, wait for the further taxpayer subsidies to come in or move home. Constantly whinging on here at every opportunity is pathetic.

    • Avatar AnotherTim

      “Constantly whinging on here at every opportunity is pathetic.”
      LOL – it doesn’t stop you.

  2. Avatar Holly

    So Annual Rental is what the ISP pays per month or per year? I hope it’s the former! Can’t be paying more than twice that a month for a service that is only that per year to the ISP!

    • Avatar Spoffle

      The annual rental is the ANNUAL RENTAL. It’s what the ISP pays per year, hence the annual part.

    • Avatar NE555

      If you are paying over £390 per month (plus VAT) for any broadband service, it’s not the FTTP service being discussed in this article.

      Almost certainly it’s a leased line, most likely 100/100 or 1000/1000. That’s a business-type service with business-type SLAs and prices to match. It’s often built on demand, and the build costs are hidden in the high monthly rental.

    • Avatar Holly

      Well – this is a service with Cerberus and is only available because we have BT WBC FTTP at our exchange – and it’s coming in from a box in the tree outside. They do from 30mbps to 1GB and its 1GB/220 and they charge an extra £185 a month for us being in the country so it’s the prices I mentioned. No leased line. They just fitted what we told was an ONT.

      The price is £565 a month – we are on a Market A exchange and although unfair as there are about 9 ISP’s at out exchange so it should be B at lease – but the website states..

      “** Pricing applies to Ofcom Market B exchanges. Non Market B exchanges are subject to a market A surcharge of £325.00 monthly.”

    • Avatar Holly

      a 1000/1000 service on a leased line with no build costs and a 3 years contract with Giganet is, ironically £590 a month with the VAT – so not much difference for the extra upload but this contract we have is 12 months only.

    • Avatar beany

      MAX and his imaginary FTTPoD service again.

    • Avatar CarlT

      Nah it’s not ADSLMax. Similarly delusional, though.

    • Avatar beany

      The ” we have BT WBC FTTP at our exchange – and it’s coming in from a box in the tree outside.” bit is what made me laugh the most. Well wood does contain a lot of fibre but whoever knew you could get netflix and mooooar upload out of it 😀

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