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Openreach Extend Free FTTP Offer to Smaller UK New Build Sites

Tuesday, January 14th, 2020 (10:49 am) - Score 4,320
engineer_openreach_2018

At present Openreach (BT) already provides their Gigabit-capable Fibre-to-the-Premises (FTTP) broadband ISP network to UK new build home developments of 30+ plots for free, while smaller builds could only get a discount. The good news is that they’ve today extended this free build offer to new sites of just 20+ plots.

The move is all part of the operator’s “Fibre First” effort to help achieve their current goal of putting “full fibre” connectivity within reach of 4 million UK premises by March 2021 (here), which is expected to be followed by their ambition for achieving 15 million premises passed by around 2025 and then possibly the “majority” of the United Kingdom at a later date.

NOTE: Openreach has already completed 2 million premises passed and they’re currently building at an average rate of 26,000 premises per week. Most of this is being delivered at the “lower end” of their £300 – £400 per premises passed cost range (applies to the first 50% of UK premises).

Naturally it’s always cheapest to do such work at the early stages of a new development, although there are quite a few sites that still fall into the smaller category. In response Openreach have now dropped the threshold for free eligibility from 30 to 20 homes.

On top of that the network access provider has also capped the amount that UK house builders contribute if they ask Openreach to build FTTP to smaller-scale developments of just 2 and 3 premises (cap is set at £2,000), which should help to encourage take-up. You can see the rate card for all this at the bottom of our article.

Overall more than 13,000 new homes across around 600 small housing developments per annum stand to benefit from the 20+ plots change and Openreach plans to drive take-up of FTTP by developers on these smaller developments from its current level of 45% to 100%.

Otherwise the programme appears to have been quite successful with 99% of plots on sites of 30 or more homes registering for FTTP. In fact since launching in 2016 the operator has connected 354,000 new build homes with FTTP and this financial year alone they’ve built 125,000 new build premises (around 3.5k new premises every week) and are on target to reach 175,000 by the end of the fiscal year (April 2020).

Kim Mears OBE, Openreach’s MD Strategic Infrastructure Development, said:

“Our existing offer already provides huge benefits to both buyers and builders alike, but we want to go further and make sure everybody moving into a new build property can enjoy the advantages of Full Fibre broadband.

The UK is a world leader in digital infrastructure and services today, but as the digital revolution continues at an ever increasing pace, and our demand for data grows, we need to make sure this country stays ahead of the curve by building fast, reliable networks that cater for all the activities we’ll want to do online in the decades ahead.

We hope these new measures will provide the necessary incentive for housebuilders to adopt this future-proof technology across smaller developments so that no-one’s left behind.

We welcome the government’s intention – outlined in the Queen’s Speech – to amend legislation so that all new build homes are required to have the infrastructure to support gigabit-capable connections, and we will work closely with government and housebuilders on how best to deliver this.”

The lower build threshold is due to take effect on 1st April 2020 and developers of such sites can register their interest (here). Now here’s how Openreach’s new build rate / cost card looks following the above changes and the addition of a £2k price cap.

openreach_fttp_new_build_rate_card_per_plot

Some readers may also recall that Openreach stopped fitting copper services to any larger sized developments (30 plots or more) in April last year (here) and thus we’ve asked whether today’s announcement means this policy has also now been adjusted down to 20+ plots, which could catch some developers by surprise. We’ll report back when we get a response.

Otherwise plenty of past studies have indicated that a good broadband connection is a key consideration for new house buyers and thus the ability to say they’re equipped for “full fibre” is not to be underestimated.

UPDATE 2:01pm

Openreach confirms that alongside today’s announcement they won’t be fitting copper for any new build sites of 20 plots or more. The one exception is that they would only agree to installing residual amounts of copper for legacy service type lines, such as lifts/alarm panels etc. where the developer doesn’t have a fibre/IP based solution.

Leave a Comment
20 Responses
  1. Avatar Adam Jarvis says:

    Let’s not rose-tint things, highlight the disincentives here too. It’s worth pointing out the site cost contribution has actually increased substantially for sites between 4-9 properties.

    1. Avatar joe says:

      Trading off cheaper 4 seems a sensible call incentive wise.

  2. Avatar Meadmodj says:

    Whilst it is welcome that OR are continuing to reduce pricing as practices/materials allow the costs to come down the issue remains that some small developers can still decline FTTP, oblige OR still to provide telephony or worse still build the house and just hope DSL or VM pass the plot.
    The Government should make it mandatory now for all new builds to be Giga capable and if the developer declines OR then they are obligated to seek VM or an Altnet. How long before the Building Act 1984 will change?, Boris said let’s get things done but the wheels are so slow and the process appears to build everything into massive acts that will take months to progress particularly if funding is involved whereas simply a one line amendment would do it.

  3. Avatar Sam Machin says:

    So if I read this right a “new development” of just 2 homes could get FTTP installed for £4000. Yet if I and my neighbor wanted it installed to our existing properties they’re asking £15k for FTTPoD, how does that work? especially as smaller developments are often infill of a few new properties between existing ones which would all be served through copper.
    I’ve got PP to convert our barns into a new home, although I don’t plan to go through with it I wonder if I can get OR to install a couple of FTTP lines into it!

    1. Avatar Gary says:

      Well you’re not a newbuild development so it doesn’t apply to you, that’s how it works.

    2. Avatar AnotherTim says:

      @Gary, I think the question was really how BT can afford to deploy FTTP to two new build properties for £4000, when it would cost many thousand more to deploy FTTPoD to equivalent existing properties.
      But I’m sure you knew that.

    3. Avatar Mrcfodder says:

      The big difference is the work the builder is expected to do, ducting in place to each premises connecting to existing infrastructure. For you and your neighbor Openreach would be doing that. Fibre on demand is very expensive.

    4. Avatar CarlT says:

      NB A brief reminder of the USO – £3,400 per property worth of legal obligation on BT to provide telecommunications services.

      Per the legalese above there’s also this:

      6 CONTRIBUTION MODEL
      6.1 Any applicable Developer Contribution Charge is calculated based on the average cost to deploy fibre infrastructure
      including an averaged fibre spine cost. The cost is divided by the number of Premises before Openreach’s commercial
      contribution is deducted.

      Average costs, not bespoke. FTTPoD costs are bespoke.

      They’re entirely different things.

      A similar question could be asked of how/why line rental is the same whether you’re next door to the exchange and it simply doesn’t break or are 7 km of shonky poles laid 75 years ago away.

    5. Avatar AnotherTim says:

      I don’t think that does explain the difference in charges – disregarding the ducting on site (which could be provided by the owner for existing buildings), I can’t see where the difference in infrastructure costs come from. Surely it costs the same to lay x miles of fibre to reach a new build site as it does to an existing site?
      I suspect that the real difference is simply that BT choose to absorb the cost for new builds.

    6. Avatar CarlT says:

      So firstly these are incremental costs on top of any that would’ve been paid for legacy copper.

      Second a reminder that labour costs are the largest part of infrastructure builds – in this case the chambers, ducts, etc, in the development are taken care of by the developer.

      Third as mentioned the USO would oblige Openreach to suck up £3.4k to connect a property with no fixed-line telephony or data access anyways.

      Fourth, yes, BT are basing the costs around averages. Much as they base the line rental to a remote property like your own on an average despite it being far harder to maintain and initially build than those in urban centres.

      In some cases getting the spine cabling to a development would be horrible. In others it’s already running past it. To get it to a new build built across the road from us here was literally just a matter of crossing the road. One chamber, into which went the fibre splitter tray, one road crossing and less than 200m of fibre that used existing ducting, spurred off the existing duct feeding an FTTC cabinet.

      Between those and the basic premise behind the deal – greenfield not brownfield, Openreach would be having to install something anyway, saves having to upgrade it later, they don’t have sunk costs to recover, there’s higher incremental revenue as before there was zero meaning commercial case to invest more per premises is more sensible it’s not at all a surprise that BT are willing to suck up more of the costs.

      £15k for FTTPoD suggests it would be a tad more complex a task on Openreach than the above was. FTTP to new builds is a commercial, high-volume product. When things are at that scale, rather than 20 deliveries a month, averaging out costs can make a lot more sense.

      It’s very much an all of the above, and why should they, and in turn their customers, eat the costs for a bespoke install?

    7. Avatar A_Builder says:

      @sam

      I understand the frustration.

      One of the opportunities with FTTPoD was to use it to build out the network. But this would have been haphazard.

      OR chose not to do this as they decided, rightly, to blanket areas is FTTP via Fibre First.

      Blanketing areas is much more cost effective as engineering and supervision & management can be physically present and dynamic problem solving is therefore possible.

      So this left the FTTPoD project as an unloved child, albeit one that is now given a slightly bigger (team) breakfast.

      So there we are.

      If Fibre First was not proceeding at the pace as it is I would say more investment in cost cutting & volume for FTTPoD was needed. That is not the case. However, I suspect we all agree that getting 30k+ per week onto real fibre is a better use of resources.

    8. Avatar Miss Bobbie.Jane Allen says:

      I’m in a fairly new build (2015), quite a big site and we have no access to fibre and our only options are BT 11mbps or Sky. Ridiculous…

  4. Avatar James W says:

    For anyone wondering what is happening RE leasehold buildings. Below is the link

    https://services.parliament.uk/Bills/2019-20/telecommunicationsinfrastructureleaseholdproperty.html

  5. Avatar Gary says:

    Good news for small developments, Hopefully ‘Might’ improve the future prospects of those older properties close by, but I’ve not seen any info on what OR are actually installing to these sites there’s a good chance it’ll do nothing for anyone else.

  6. Avatar TheFacts says:

    Why does site charge peak at 7 plots?

    1. Avatar CarlT says:

      I presume due to a combination of costs on the Openreach side and their commercial contributions.

      Each OLT port feeds 30 premises passed, with another couple of ports kept as ‘spares’. Maybe 7 is a bad number from the point of view of costs versus revenue.

  7. Avatar David says:

    33 houses on our estate – built in 2016. Not had a sniff of BT not even for FTTC. So if they did it for free they didn’t tell anyone.

    1. Avatar Squidgy says:

      It would have missed start of the free FTTP build offer to developers

    2. Avatar New_Londoner says:

      @David
      How do you know? Any contact from any network operator would have been with the developer.

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