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Openreach Unveil Major FTTP Pricing Offer for UK Broadband ISPs UPDATE

Thursday, July 1st, 2021 (8:31 am) - Score 14,208
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Openreach (BT) has today unveiled a “major” change to the pricing of their gigabit-capable Fibre-to-the-Premises (FTTP) broadband products, which aims to give UK ISPs not only cheaper services but also “long-term price certainty” through a series of new commitments. But in return, providers must push FTTP wherever they can.

At present, Openreach’s full fibre rollout has already covered over 5 million UK homes and businesses (1.9 million were added during 2020/21) and is running at a build rate of c.43,000 premises per week. In addition, Openreach are seeing orders for this service – via various ISPs (BT, Sky Broadband, TalkTalk, Vodafone, Zen Internet etc.) – running at a rate of c.17,000 per week.

NOTE: 6.2 million premises in their plan are in Ofcom’s rural or semi-rural areas (here).

However, the BT Group is planning to invest £15bn in order to ensure that this network is extended to 25 million premises (c.80% of the UK) by December 2026, which means that their build will continue to ramp-up until it hits a peak of c.75,000 premises per week (about 4 million premises deployed a year).

In order to support this, the operator needs to ensure strong take-up by consumers, and to that end they’ve been busy planning future discounts since early 2020 (here) and recently restarted negotiations with major ISPs (here), like Sky Broadband, Vodafone and TalkTalk. We now have the result.

What’s Changing?

The new offer appears to be based around a set of core principles, which among other things are designed to reward ISPs that help to put any new customers on to FTTP, as well as those that migrate or upgrade customers away from their legacy copper line broadband services.

Openreach’s Offer Principles

· Commitment: where ISPs choose to purchase from Openreach they commit to using FTTP wherever it’s available (including new provides and technology regrades) – rather than older services such as those based on Fibre-to-the-Cabinet (FTTC / VDSL2) or purely copper technology (ADSL / analogue phone etc.) – with no volume or migration targets.

· Pricing certainty: Openreach will give pricing certainty for up to 10 years in return for this ‘stop-sell’ commitment

· Simplicity:
A single national rental price will apply to the entire Openreach FTTP footprint

· Competitive prices:
Prices will be competitive whilst offering a fair return for Openreach. ISPs can tailor offers across a range of speed tiers and take-up of higher bandwidths will be encouraged with further rebates, whilst pricing is set by Ofcom on the lowest speed tier (40Mbps downstream, 10Mbps upstream).

Ofcom’s recently revised rules (here) require Openreach to give 90 days notice of such changes, partly so they and the market have time to assess its impact. Due to this, the offer will be open for participation between 1st October 2021 and 30th March 2022. The long-term pricing certainty will last until 30th September 2031 and be available across the entire FTTP footprint.

The discounts themselves are available to ISPs where they choose to place new orders with Openreach and commit to making a percentage of those on the FTTP network, where available. A summary of the revised pricing can be found below, and we note that premises in Ofcom’s Area 2 (70% of the UK – those deemed “potentially competitive“) will also benefit from a discount on the one-off connection fee.

Openreach-FTTP-Discount-July-2021

Remember, the above reflects wholesale pricing, which means that they don’t account for all the extra costs that an ISP must add (20% VAT, services, network capacity etc.) and thus retail prices, which is what we all pay as consumers, will of course be much higher than this.

Katie Milligan, MD of Openreach’s Customer, Commercials and Propositions, said:

“Nobody’s building Full Fibre broadband faster, further, or at a higher quality than Openreach, and we’re well on track to reach 25 million premises by December 2026.

At the same time we’re determined to make Full Fibre the default option for customers throughout the UK, so we’ve been working closely with Communications Providers to offer simple and competitive pricing which gives them the long-term certainty and flexibility they need.

We believe this offer makes Full Fibre a must-have for every home and business, and it means more people could start benefitting from our most revolutionary and reliable broadband sooner.”

Just to put the new monthly rental change in some context, using two of the examples above. At present, if you take out a 115Mbps or 1000Mbps consumer FTTP tier the wholesale charge for an ISP would be £17.44 and £31.57 respectively. Suffice to say that charging £15.50 and just £22 per month for the same tiers, respectively, is a huge change, particularly for larger ISPs. The full price list can be found here.

Ofcom’s recent changes to the market mean they’ll have to follow Openreach’s announcement in a couple of days, not least by asking the industry to submit views so that they can assess the new offer. This is important because some alternative network (AltNet) providers (Cityfibre, Hyperoptic, G.Network, CommunityFibre etc.) will no doubt be concerned about any potential anti-competitive impact on their rival services, which are in a weaker position than that of the incumbent.

By comparison, Openreach will be mindful that many of those new FTTP rivals are often able to offer significantly cheaper and more capable packages (symmetric speeds etc.), which is partly why they may feel a need to make their own services more affordable in order to stay competitive (they don’t want to lose too many of their ISP partners and consumers to rivals).

Ofcom’s job in all this will be to try and find some balance between the many opposing views, which enables Openreach to get a return on their investment by pushing forward with FTTP, albeit without giving them so much freedom that it potentially causes harm in other parts of the market. It is not an easy task.

The regulator previously said that they could “restrict” any discounts that are too aggressive, but their recent market review left a lot of flexibility for Openreach to play. We await Ofcom’s consultation with interest. At the same time Openreach, as well as other operators, have to be careful about the risk of making FTTP so cheap that it becomes much harder for them to recover their investment.

UPDATE 2nd July 2021

As expected, Ofcom has begun a new consultation (Call for Inputs) on Openreach’s new long-term pricing offer to ISPs (here), which will be open to responses until 5pm on 16th July 2021. A provisional decision is then expected before the new offer is introduced. The biggest interest will no doubt stem from how Openreach’s rivals in the altnet space respond to this.

Separately, we note that the terms for Openreach’s offer makes mention of a 6-year review mechanism for the offer, which casts a potential shadow over their pledge of “pricing certainty for up to 10 years.”

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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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50 Responses
  1. James™ says:

    I wonder if any ISPs will pass on the savings to help encourage the take up, if I remember the last big price change did this.

    1. Mark Jackson says:

      At this scale of change, yes they will, although obviously there will always be some variation in the degree to which they’re passed on.

  2. Jono Brain says:

    Smart move. Time to get as many people who can get FTTP onto it.

  3. Dave says:

    Just need to get the cables laid, I’m with Virgin at the moment as they are the only ones who offer the half-decent upload speeds I need for effective working from home…but they are far too expensive.

    City Fibre have the roads dug up all over nearby, I just hope they are live by the time my Virgin contract ends.

    1. Anthony Goodman says:

      I wish there was more info on how long after they dig up a road and put in the cable their service becomes available with CityFibre.

    2. Dave says:

      @Anthony – judging by the article on here other day regarding CF going live in Rotherham – it said the work started last summer and has only just gone live in some areas.

  4. Ben says:

    Looks like BT is feeling the heat from TalkTalk et al. using CityFibre in some places, presumably due to their more competitive pricing. Good news! Hopefully BT addresses their (IMO) fairly extreme asymmetry in a future product update.

    1. New_Londoner says:

      @Ben
      WHilst Openreach may provide more symmetrical options when XGS-PON is deployed, it doesn’t really seem to be a significant factor for the majority. Whilst some on here appear to want to run datacentres from home, the more typical users still consume rather more content that they generate, even when taking into account working from home etc.

      Remember that most people on FTTP are still taking the very lowest speeds offered, seeing little need for anything faster and therefore no justification in paying more.

    2. 10GforAll says:

      New_Londoner, I read somewhere that OR was installing XGS-PON capable kit.
      I asked the contractor I saw on my street and he said nope it’s GPON only. I don’t think we will see XGS-PON for a loooong time. In the openreach video produced recently where the engineer discusses the head end, this question pops up and they say no plans for 10Gbit not at least until 2025-2030 and that 1Gbit is “enough”. I guess for residential, it probably is.

      I don’t need mega download speed, but I would like better upload. That’s why i’ll be taking the OR fastest FTTP (1000/200) because I want the 200 upload. Honestly if they offered 200/200 I’d take that instead but as far as I can tell, that’s not an option right now.

    3. A_Builder says:

      “ I don’t think we will see XGS-PON for a loooong time. In the openreach video produced recently where the engineer discusses the head end, this question pops up and they say no plans for 10Gbit not at least until 2025-2030 and that 1Gbit is “enough”.”

      The tipping point arrives where the cost of amortised cost of XGS crosses over with the amortised cost of plain GPON + cost curve of XGS – at some point, sooner rather than later XGS installation will take over purely because it will be cheaper in the long term as the world moves forward to newer flavours of GPON and 1G Starts to be old hat.

      BTW I can’t think of a domestic use for 10G but I can see why SME’s might want more than 1G.

    4. John says:

      There’s no further plans for XGS-PON at present.
      They ran a (very) limited trial which closed for new orders way back in January.

      https://www.openreach.co.uk/cpportal/updates/briefings/ultrafast/nga203020

      There have been no other deployments of XGS-PON kit on the OpenReach network before or since.

    5. GNewton says:

      @10GforAll: The issue with the upload speeds is something that many posters here don’t seem to understand. In other countries, such as Verizon Fiber in the States, fibre broadband services are symmetric, or at least have sufficient upload speeds. It is strange why it’s different in this country.

    6. New_Londoner says:

      @A_Builder, 10GforAll
      As recently as last year there was still at least a 15% or more price penalty for buying XGS-PON versus GPON. I’m seeing evidence that the price for XGS-PON now though is nearly identical in price to buying the GPON, at least in the US. If that is the case then I’m sure network operators will rapidly move to the faster kit, even if it takes a while before product offerings catch up.

    7. NE555 says:

      > That’s why i’ll be taking the OR fastest FTTP (1000/200) because I want the 200 upload

      Unfortunately 1000/220 is available from hardly any resellers – it’s not even in BT Business published price lists. From Cerberus it will cost you £180+VAT per month (plus £495 installation), which is not far off the price of a leased line in some areas.

      If you can live with 450/150, that’s more affordable at £125+VAT per month. But it may be better just to bond two 1000/115 lines together.

    8. CarlT says:

      Think more that people aren’t too concerned Mr Newton. The odd person actually notes this is a 2-way medium and takes on board what people say even if it doesn’t affirm their own thoughts.

      Verizon and AT&T don’t wholesale.

      As they don’t wholesale they don’t have agreements on minimum performance levels with other businesses.

      US consumers are used to heavily upstream restricted cable services and are more tolerant of upstream congestion.

      US consumers are used to paying more.

      Yes, some of the Openreach decision is a business one but comparing UK to the USA is pointless.

      Is the next plan to perhaps compare the UK to Singapore, where you can buy 10G over XGSPON so even if no-one else is using it and you have the whole split to yourself you can’t get 10G?

      Maybe Japan, where providers were selling 2 Gb down, 1 Gb up on GPON?

      France, where services dropping to 30% of off-peak performance at peak times isn’t especially uncommon?

      Maybe some of Eastern Europe where people buy gigabit FTTB services with the entire 200+ unit building having a single gigabit backhaul?

      Remind me of me before I learned what I was talking about. Not a good place to be. CityFibre wholesale symmetrical, VMO2 will be, various other altnets sell symmetrical to retailers. Heavy regulation over performance and quality alongside infrastructure competition are where we are.

  5. Meadmodj says:

    Good news for the multitude of smaller ISPs that use the OR infrastructure and this will keep choice and competition alive. ISPs like ZEN who have agreements with more than one provider will need to decide whether they will mix their products within a geographical area where more than one of their providers are present.

    The commitment may certainly increase OR FTTP adoption hopefully within one contract/renewal cycle.

  6. Gelectric says:

    Will this help to fix the two tier system that seems to now exist where certain ISPs are choosing not to offer their Openreach FTTP services in Northern Ireland, even though they are available to FTTP Openreach customers in Britain? (Vodafone and TalkTalk spring to mind).

    1. CarlT says:

      No, afraid not.

  7. AnotherTim says:

    This will make the wholesale monthly price of OR’s 1000/115 service less than the wholesale price of Gigaclear’s 50/50 service.
    The differences between different areas in what broadband is available and the price it is available at is becoming increasingly inequitable.

    1. New_Londoner says:

      @AnotherTim
      Indeed. It seems economies of scale are beginning to bear fruit for Openreach, which is not surprising when it is currently building at a rate of roughly three City Fibre networks per year, increasing fairly soon to four per year.

      As others have posted on here, there will need to be some consolidation soon as experience with the cable industry suggests that the current number of operators is unlikely to be viable long-term. What people seem to be overlooking is the very real risk of stranded assets if there are multiple operators in a given area and they don’t all find buyers.

    2. CarlT says:

      Reflecting the inequitable costs of deployment.

      Gigaclear don’t have the £200-£500 per premises passed urban areas to subsidise the rural ones.

      Even their BDUK gap funded properties they’re still putting in £1.2k per premises passed.

      I wouldn’t be too surprised to see Gigaclear charge different prices depending on competition in the local area.

      Assuming their network isn’t acquired in the interim.

  8. PAUL APPLEYARD says:

    Re upload speeds. As more bandwidth becomes available people will find uses for it. I always thought OR hobbled upload speeds ro reduce business use but obviously it’s more technical than that! If your WFH with large data sets upload speed is a must. I have 300/300 and my limiting factor is my clients VPN they insist I use. If I’m using a cloud service I can get some pretty decent upload speeds. I guess I’m an edge case

    1. A_Builder says:

      Not really an edge case: just a serious user.

      I’d say pretty much the same except I’m on GFast with a 48.5mb/s max upload and I really could do with 150 upstream.

      As well as running a construction firm I also have a digital business.

  9. Anthony Goodman says:

    I know this is great for the consumer. But I do feel this is partly the big boy trying to stifle competition. Cityfibre were absolutely killing it. Faster speeds, lower prices and faster cable laying and were set to potentially become a very big player. This price drop really is – I suspect – largely aimed at shutting their success down.

    1. FCL says:

      Faster cable laying? Don’t think so.

    2. Sussex Fibre says:
    3. Alex says:

      What are Openreach supposed to do, roll over and let competitors tickle their tums?

    4. A_Builder says:

      Committed pricing for 10 yrs cuts both ways.

      Investors love long term income certainty.

      Consumers love cheap.

      I’d get the squash XYZ Alt net theory if it wasn’t for the 10yr commitment which kills the “we are doing it to bury the competition and the ratchet up argument” stone dead.

    5. Ivor says:

      OR are going a lot faster at rolling out than anyone else is, and in reality even with the alt-net pressure it is likely that the majority of us will be getting our FTTP from Openreach, especially those of us who do not live in the most “desirable” areas (i.e. the places that don’t already have Virgin).

      Perhaps we could give the alt-nets credit for finally steering OR off of their previous “copper is great” ideology?

      Competition is supposed to work both ways. If Openreach can use their economy of scale & existing infrastructure to win (ISP) customers then why shouldn’t they be allowed to do that?

  10. jet says:

    How about bringing in sensible affordable prices ie. £10 – 80/20, £20 – 150, £25 – 300, £30 – 500 & £40 for 1000Mbs £50 – 1000/1000.

    1. Bob says:

      What about it? These are B2B prices and not what you will end up paying.

  11. Ramzez says:

    But will BT Wholesale which lost providers using will change their pricing as well? That’s the question.

  12. Rocky12345 says:

    Is this why BT have stopped offering FTTC? Problem is I won’t be getting FTTP until December 2026! Other providers are still offering FTTC. I realise it might just be in my area/line? Wondered if they got hasty when announcing exchanges due to be included in the FTTP rollout?

    1. Ivor says:

      …. no. As the article already says, it is about getting ISPs to commit to pushing FTTP where it is available. Obviously if you can’t get FTTP you will still be offered something else.

      Also, it is “by December 2026”, i.e. you could well get it a lot sooner. BT themselves are still going to happily sell you FTTC and even G.fast (if available) until that time comes. If FTTC has gone missing from the checker then it is likely that the FTTC cabinet is full, so no ISP can sell new services from that cabinet until or unless Openreach do something about it.

    2. Rocky12345 says:

      BT Wholesale checker states FTTC is available (checked via phone number and address), though I know that the speed estimates are based on the top 20% of lines, so it doesn’t really indicate what service you will get. BT Retail don’t offer FTTC on my line, they only offer ADSL 3mbp Down 1mbp up for £32.99 a month!. Most other ISPs do offer FTTC, but these use the wholesale checker as a guide, so I suspect BT have a more detailed understanding of what can be provided on my line. I currently have a FTTC connection (20/5), so doubt I will move supplier anytime soon given the ambiguity of what is available.

  13. Power to the People says:

    This is not the end of price reductions. The reason they have guaranteed the price for 10 years is because they know the prices won’t go up, more likely down. The City Fibre wholesale price for their symmetric 1Gb service is still less than the 1Gb OR wholesale price I am led to believe.

    So prices will continue to go down and I suspect we will see a reduction in the number of products as well. Maybe only 500Mb and 1Gb services above 80Mb.

    There is competition now from other Altnets which has started a race to the bottom. I think toob offer a 1Gb service for £25 retail. That is probably where everyone will end up within 5 years is my guess.

    We are getting close to the point where no one will switch as the pricing will be so low the difference won’t warrant the agro.

    All great news for the consumer though.

    1. Graham T says:

      yes i think you are right with that price point but you know what will happen when it gets to that price, there will be 2gb, 5gb and 10gb packages available for £60+ but as u say good for the consumer the speeds+price

    2. Alex says:

      Everyone loses in a race to the bottom

    3. Anthony Goodman says:

      If companies listed the same speeds for FTTP as FTTC it would cause so much confusion to the masses over what to get. One of the biggest selling points is FTTP is faster. So I would say it would be logical if companies offered 150mb, 500mb and 1GB. Therefore even the lowwest available speed is around double the theoretical maximum of FTTC.

    4. NE555 says:

      The vast majority want “cheap” not “fast”. If you gave them a choice of 40/10 FTTC, or 160/30 FTTP at £1 per month more, most will take the cheaper 40/10 FTTC.

      Openreach’s goal is to move people off copper, not to sell faster services, so there has to be a tier of FTTP which is attractive at the low end.

  14. kuro68k says:

    Why are the upload speeds so pathetic? Is there some technical reason it’s so slow? Other fibre providers offer 1000mbps up.

    Trust OpenReach to somehow make even FTTP suck.

  15. peterson says:

    Many countries been using gigabit speeds with same upload speeds since 2004 basically. UK is the one behind the world. So just be happy you can use internet at all in this place haha. They lack of knowledge to provide good broadband to customers. Even Ireland did a better job than uk pathetic. Stuck here with 9mbps upload speed for 10 years can’t even upgrade nobody offers here more than that.

    1. CarlT says:

      Can’t tell if trolling or deluded.

  16. Carl T says:

    This seems to have passed the Buggerlugz test for now.

  17. fsociety3765 says:

    1000/115??? Will Openreach not be offering a symmetrical service on their fiber network?

    CityFibre offers symmetrical 1000/1000 on their network. I think Vodafone markets it at 960/960 though.

    1. Mark Jackson says:

      Yes, but at present the only plan that we’ve seen for that is focused upon premium business packages, not consumer products. I suspect you’ll be waiting longer before the same arrives for residential users, since that will require a sizeable hardware upgrade.

  18. Richard says:

    Will this affect the current price of FTTP to the consumer? Wouldn’t want to be locked into an 18-24 month contract and the prices dropping significantly a few months into it.

    1. Jon Giles says:

      I thought the same – my property has just come available for FTTP orders (although only up to 330/50 for some reason) and I am wonderinf whether to wait until Oct to order – paying through the nose for VM and am looking forward to the customer retentions conversation… you never know might even stay on VM at a better price!

  19. Kamal says:

    Hi, does it mean that the internet service charges will drop soon through BT, Sky, Vodafone, EE? I mean those ISPs who use the network of Openreach!

  20. Vodafone bad says:

    It’s a shame that Vodafone won’t be able to take advantage of this fiber deal. The haven’t been able to secure the permission from openreach to expand their role-out. Seems like it is going to purely be Cityfiber that they will be using for their FTTP. Such a shame as they could get so much business from the full fiber market.

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