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Ofcom UK Delay Start of Openreach FTTP Broadband Price Cuts UPDATE3

Friday, Mar 17th, 2023 (7:24 am) - Score 7,992
openreach bt fibre optic cable hands

Ofcom has this morning announced that they will need “an additional two months” to undertake further analysis of Openreach’s “Equinox 2” discount scheme, which will delay the operator’s planned 1st April 2023 launch of cheaper wholesale prices on their Fibre-to-the-Premises (FTTP) based broadband ISP products.

In case anybody has forgotten, Openreach were preparing to introduce another round of wholesale discounts on their FTTP products (here). Ofcom had already given provisional approval for this after stating that “the offer is not anti-competitive and is consistent with the rules” (here). The move will help the operator’s ISPs to stay competitive with newer and often cheaper Alternative Networks (Summary of UK Full Fibre Builds), which could in turn boost take-up by consumers (cheaper packages) and thus aid the move away from copper lines.

NOTE: BT are investing up to £15bn to cover 25 million premises with FTTP by December 2026 (80%+ of the UK). So far, they’ve already completed 9.6 million.

The discounts themselves are not as dramatic as the original Equinox 1 offer, with smaller changes to rentals and some reductions in connection charges. Nevertheless, more than a few AltNets viewed the move as being anti-competitive (here), with CityFibre even going so far as to lodge a Competition Act complaint with the Competition and Markets Authority (CMA) and Ofcom (here).

Alternative networks carry a lot of risk due to being in the earliest stages of investment and competitive infrastructure build, although they previously enjoyed a market where Openreach was traditionally more expensive. This made it easier for them to grow take-up, attract investment and gain support from third-party ISPs to their equivalent wholesale options.

Ofcom had originally been due to complete their review of the new discount scheme – a requirement of the current rules – by the end of March 2023. But the regulator said that their consultation on all this had resulted in a number of “detailed responses” from the wider industry, some of which are said to have “raised issues which require further assessment.”

Ofcom Statement

We had planned to publish a final decision on the consultation by the end of March 2023. We now anticipate that it will take an additional two months to undertake this further analysis and issue our final decision.

The Equinox 2 offer is due to launch on 1 April 2023. To provide certainty and stability for industry, our view is that it would not be appropriate for the offer to launch until we issue our final decision.

We are considering issuing a Direction to Openreach, using our powers under the Communications Act 2003, to achieve this, unless Openreach voluntarily defers the launch of the offer.

Separately, Ofcom also noted that a number of respondents to the consultation referred to a recent interview given by BT’s CEO, Philip Jansen, to the Financial Times on 2nd February 2023. This is a reference to the now somewhat infamous remarks that were made, which saw him warn that their fibre rollout was now an “unstoppable machine” that will ultimately “end in tears” for many of its rivals.

Digging his heels in deeper, Jansen then suggested that, once all is said and done, there is “only going to be one national network” (bad luck CityFibre and VMO2?), before questioning “Why do you need to have multiple providers?“. Such remarks were perhaps quite poorly timed, particularly given Ofcom’s review of Equinox 2. The regulator has been trying to grow competition and is alive to the perception that it may be giving Openreach too much of an easy ride.

In the interests of transparency, the regulator has now published an exchange of letters between Mr Jansen and Ofcom by way of a follow-up to that article. The letters see Ofcom warn that Jansen’s remarks “caused us significant concern“, before reminding BT of its current review, future monitoring report and BT’s own commitment to “fair competition“.

In his reply, Jansen apologised and said that “some of my comments [had] been taken out of context” in the FT article, before giving examples. But we’ll leave it up to our readers to judge how out of context they were.

Examples of Jansen’s “out of context” Remarks

• “There is only going to be one national network” was part of a broader discussion about the truly national ambition Openreach has – both urban and rural – and the progress they’re making towards that. It was not in any way a comment about other builders.

• “Why do you need multiple providers?”, was preceded with (but not reported): “If you are a CP, you would probably prefer one wholesaler with one technical solution, if they can give you the geographic coverage you want…” It was therefore about potential CP preference, not the broader market.

• “No one else has got a machine anywhere near ours. It’s . . . unstoppable.” This was in answer to a question on the scale of ambition and my confidence in Openreach’s ability to deliver a truly nationwide network.

• When asked about the likely future shape of the market, I said I believed there would probably be two players with major footprints – BT Group and VM-O2 – and then a number of alt nets who have built strong businesses. I then gave the example of [redacted] which has five builders, to say that inevitably that this kind of overbuild could “end in tears” for some. Again, it was not a comment about the whole market and does not reflect the wider context in which it was delivered.

Back to Equinox 2. Ofcom’s decision to delay their final decision will no doubt be welcomed by AltNets, although we suspect that Openreach’s many ISPs will be somewhat less than pleased. The ISPs are the ones putting pressure on Openreach to reduce their prices and thus enable them to stay competitive with newer entrants, while some of them may have already worked the discounts into their existing package pricing. A delay will thus cause some pain, but the operator has an answer for that.

An Openreach spokesperson said:

“Whilst we continue to share Ofcom’s initial view that our offer isn’t anti-competitive, it’s important the regulator has time to consider all the feedback it has received fully and fairly, so our discounted Full Fibre prices won’t come into effect on 1st April. That said, we don’t think customers should be forced to pay higher prices because of this delay so, if Ofcom’s initial assessment is confirmed in May, we will ensure our customers benefit from Equinox 2 pricing from 1 April.

Our offer is a response to customers, who want lower prices and long-term certainty to help them switch to faster, more reliable broadband connections. It also supports our continued multi-billion pound investment to upgrade the UK’s broadband infrastructure.”

The big question now is whether or not the regulator will end up reaching a different conclusion from that of their provisional view, which would be quite a big development if it occurred. Meanwhile, consumers hoping for even cheaper FTTP broadband packages on Openreach’s network may have to wait a bit longer, since ISPs that haven’t yet adjusted their packages will now be more cautious.

UPDATE 10:53am

We’ve had a comment from INCA, which represents AltNets.

Malcolm Corbett, INCA CEO, said:

“We welcome Ofcom’s confirmation today that its role is to ensure a level playing field for all investors in UK full fibre. INCA and its members have worked hard to provide Ofcom with information and evidence on why its initial evaluation of BT wholesale discounts set out in the Equinox 2 pricing offer was insufficient.

We will continue to work with Ofcom over the coming months to help them come to a proper conclusion. Fundamentally they must question why BT group are reducing their wholesale charges whilst increasing the prices that consumers pay for broadband.”

UPDATE 2:30pm

CityFibre has now given their reaction.

CityFibre CEO, Greg Mesch, said:

“Ofcom appears to be taking industry’s concerns seriously. Taking more time to properly consider the impact of Equinox 2 is the right approach if UK consumers and businesses are to benefit from a healthy competitive market for the long term.”

UPDATE 19th March 2023 @ 4pm

After talking to a few sources, we believe that at least part of the reason for this delay is that some operators have argued that there may be miscalculations in Ofcom’s last wholesale market review. In short, this would mean that the Equinox 2 offer may be below the costs of an idealised operator.

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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 X (Twitter), Mastodon, Facebook and .
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Comments
96 Responses
  1. Avatar photo Buggerlugz says:

    Really OFCOM, you sure its absolutely nothing to do with Openreach cutting the price for installs and BT then charging customers more then? (Isn’t that racketeering?)

    1. Avatar photo Reality Bytes says:

      No. No it isn’t. No-one has to pay BT for full fibre: they can go to another provider reselling Openreach that may be passing the discounts on.

      Customers pay BT, BT pay Enterprise, Enterprise pay Openreach. If BT are getting a discount from Enterprise and not passing it on other Enterprise customers can. If Enterprise aren’t passing on the Openreach discounts Zen, Sky, TalkTalk Business and others could.

      If none of them are it leaves a gap for VMO2, CityFibre and others.

    2. Avatar photo 125us says:

      If it was only possible to buy broadband from BT, maybe.

      But that’s not the case, is it?

  2. Avatar photo Bob says:

    I want symmetric services not cheaper prices…

    1. Avatar photo anonymous says:

      I’m lucky (soon) to get symmetric and cheaper prices by a bigger ALTNET. They are doing it properly with XGS-PON, none of this legacy non-symmetric GPON stuff used by BT (cue BT fans saying BT going to XGS-PON. True, but there will be a trial, then a trial extension, then a pilot and then delay then another trial then deployment when everyone else moved onto something better by that stage)….

    2. Avatar photo JamesP says:

      I want cheaper prices, as I do not need symmetrical services*

      *I reakon that goes for the vast majority of users.

    3. Avatar photo anonymous says:

      Yes, of course I’d want a more expensive service that is more limited, than a better service that is cheaper with better support.

      Yawn. You get back to your superfast FTTC. I like choice of being ABLE to have a symmetric service even if it was a little more expensive to a non-symmetric service like BT (which currently its a LOT cheaper on my local ALTNET which is one of the bigger ones).

    4. Avatar photo Bob says:

      “I reakon that goes for the vast majority of users.”

      Probably, but there should be a choice

    5. Avatar photo Reality Bytes says:

      Almost certainly be available at some point in the 5 years if you’ve FTTP already.

    6. Avatar photo JamesP says:

      anonymous – I have FTTP thanks, the package I have chosen and upload speeds are sufficient for my needs. I would prefer a cheaper price over a faster upload that’s not required.

      Bob – I think the choice will come in the future as demand for it increases. But I don’t believe the demand is overwhelming (with the exception of a few here) at the current time. I’m pretty sure Openreach will be looking to upgrade their FTTP services, to include faster upload speeds, in the next 5+ years as coverage nears 95-100%.

    7. Avatar photo anonymous says:

      Again, why do I want to wait for BT to get their act together?

      As soon as my ALTNET has completed, I will be able to have full symmetric services, up to 10gbps if I want to pay for it (I have no need for that speed tier though). In five years Virgin Media will also being doing XGS-PON and symmetric services too, so if its 5 years, BT are again late to the party.

    8. Avatar photo Ad47uk says:

      @JamesP, symmetrical is good, I would not mind symmetrical myself, but I don’t want to pay more to get it. By all accounts we could have had symmetrical services years ago even on FTTC, but openreach done it on the cheap.
      I am glad Ofcom have delayed the price cuts, hopefully they will not allow them to go ahead for a couple of years.

    9. Avatar photo Reality Bytes says:

      Openreach didn’t do it on the cheap. They used GPON as it made sense, XGSPON was crazily expensive, and their customers wouldn’t have tolerated the cost of the ONTs. Only relatively recently has the pricing on those become more sane.

      They want to keep a standard as much as possible which makes sense, too.

      The actual network carrying the light is well built.

    10. Avatar photo Ad47uk says:

      @Reality Bytes, I said they did FTTC on the cheap as the technology was around then to have symmetrical FTTC.
      You say that they did not do it on the cheap for FTTP, The technology for symmetrical FTTP is widely available now and at a better price and yet their new super superfast FTTP service they are going to trial is still asymmetrical. so still doing it on the cheap.

    11. Avatar photo John says:

      Adrian you haven’t got a clue.

      The FTTC rollout started in 2010 with profile 8a. In 2012 they changed to profile 17a.
      G.Fast put a nail in any possibility of upgrading to profile 35b.
      Openreach picked the right VDSL2 profile with 17a for their network layout.

      What VDSL2 profile do you suggest they used on FTTC for symmetrical speeds that wouldn’t significantly decrease the downstream and/or range for the vast majority of users?
      I’d love to hear your response.

    12. Avatar photo Ad47uk says:

      @John, thanks for the info, I did not know that. I bet you was not expecting that, you could have been a bit politer

      So what you are saying is that it would not be possible to have symmetrical on the FTTC system we have now?

    13. Avatar photo John says:

      Well I’m certainly not aware onf any VDSL2 profiles that could be deployed from the current DSLAMs while maintaining the current downstream rates and reach.

      I’m not aware of any national networks who have deployed symmetrical FTTC.

      It’s a niche requirement that only works for shorter loops than Openreach cabinets have, such as apartment/office buildings with existing twisted pair throughout. Stick a DSLAM in the basement and you’re all set.
      G.Fast would now be a better choice for such setups though.

      Symmetrical VDSL2 would need to use some of the downstream frequencies for the upstream, reducing the downstream. Mixed profiles can’t exist on the same cabinet unless the tone spacing matches so they can’t even do it just for a subset of customers.

      It just isn’t viable.

    14. Avatar photo Ad47uk says:

      @John, thank you now I know. I still think it is strange that Openreach don’t have symmetrical FTTP. I know that is possible.

    15. Avatar photo Reality Bytes says:

      ‘@Reality Bytes, I said they did FTTC on the cheap as the technology was around then to have symmetrical FTTC.’

      Indeed, though you’re wrong. Doing symmetrical FTTC means lower download speeds for people at the same distance from the cabinet. Nothing to do with it being done on the cheap, they made the decision not to sacrifice download speed for upload speed.

      No cost difference between the two. Product decision, not financial.

      Like G.fast, ADSL, etc, there’s an aggregate speed, the total of download and upload, and they chose to allocate as they did. 80/20 would’ve become maybe 50/50. People able to only reach 40/10 would’ve ended up on maybe 25/25.

    16. Avatar photo Ad47uk says:

      @Reality Bytes, yes, I know that now. John Explained it

  3. Avatar photo Andrew G says:

    Ofcom are trying to grow competition because that’s government policy and was under Labour, too. Unfortunately, the politicians have never seen (or don’t understand) the necessary calculations to work out whether multiple competing physical infrastructures in fact offer a better overall deal for customers, or are even economically viable. In other physical utilities it’s recognised in the UK and around the world that duplicate infrastructure is unviable, weirdly in the UK telecoms sector it’s a policy goal. Looking at the finances of the altnets things are not good and I doubt without big writedowns they will ever by both cost competitive and profitable. The history of UK cable networks is a further lesson unlearned, since after thirty years they’re still not making a viable return on capital.

    What’s going on here is that the rich private investors in altnets have been badgering the regulator and lobbying politicians for Openreach to be stopped from cutting wholesale prices simply because that harms their investments. As usual, the question arises as to who the country is run on behalf of, and the answer remains the same: Not you or I (unless you’re very rich).

    1. Avatar photo Buggerlugz says:

      The politicians can’t fathom how to syphon the money into their own pockets, that’s why.

    2. Avatar photo anonymous says:

      Openreach based ISPs will never be cheaper than the bigger ALTNETS anyway. Those price cuts will just go in the coffers of the ISP. They may make better introductory offers and that’s about it…..Openreach based ISP is a choice of last resort here. I’d rather go symmetric XGS-PON with Virgin Media if my ALTNET goes bust in the future (2028 timeframe) and do the price haggle game than use a non-symmetric Openreach based service. Now if Openreach decide to do the right thing and go symmetric then I could be interested, but I see them as more expensive than an ALTNET or Virgin Media, the latter you can get decent pricing if you are good at haggling.

    3. Avatar photo anonymous says:

      Buggerlugz, I agree. They can’t see the bottom of the trough for all the food they snorting around…

    4. Avatar photo Andrew G says:

      anonymous: “Openreach based ISPs will never be cheaper than the bigger ALTNETS anyway.”

      How so? I take the point about big ISP pricing, but the same is true with (for example) Vodafone over CityFibre. So coming back solely to the altnets, they lack scale, they haven’t adopted a standard infrastructure to support the inevitable consolidation, their cost per property when building new networks is wildly higher than Openreach whose ducts are both better utilised and long-depreciated, and they’re accruing large losses onto their balance sheets during their build out phase. And if they don’t play the massive discount + massive price rise game, they’ll lose out in future switching, because anti-big company idealists are a tiny niche market. Unfortunately the laws of economics are as immutable as the laws of physics, and short of regulations that subsidise the altnets, they aren’t going to survive in their current form, even if the assets continue to be used.

      By all means plan to go with VM if that floats your boat (I just left: awful company), but they too aren’t making a viable return on capital, so will need to put up prices massively over the next few years. I did the maths in a post in VM’s forum the other week, and to earn a reasonable return on capital employed, VMO2 need to increase sales by about 40% without increasing their costs at all. Their network can’t support 40% more customers, the expensive and protracted Project Lightning resulted in no material increase in customer numbers, they make a loss on acquisition pricing, so how can that play out as both altnets and Openreach build networks that can compete on speeds, and other ISPs offer high speeds plus better service?

    5. Avatar photo anonymous says:

      I’m with VM Hybrid HFC right now but intend to go to a decent sized ALTNET who intend to do wholesale access at some point. They have built their network as close to what BT do as possible, but using XGS-PON not GPON.

      If BT cut wholesale costs then the PIA costs should be cut at same time and similar amount. They inherited most of their PIA from the tax payer as already built for most of the country unlike an ALTNET that is starting out.

      Consolidation would accelerate if BT allowed to do price cuts – and the only reason BT want to do that is to undermine then take control to monopolise again and offer a service that isn’t on par in my view. Can you imagine a world with just BT and VM? We would be FLEECED.

      Th history of UK cable networks is interesting. Everything was trenched using much more expensive methods than today, the cables were more expensive, the management was dubious resulting in frustrated customer leaving over inaccurate bills and poor support. Historic cable companies also had dubious picture quality on their TV services compared to a well setup satellite feed at the time, and they decoded off air pictures and recoded them for use in their network distribution. So many reasons and they didn’t offer broadband in a semi-decent way until Virgin Media was formed and DocSIS had moved on.

    6. Avatar photo Andrew G says:

      “Can you imagine a world with just BT and VM? We would be FLEECED.”

      Only absent effective regulation, but that’s a separate and speculative debate. I still haven’t seen how more competition will make altnets viable – even allowing better techniques than the original cable networks, there are now much higher standards for streetworks so costs have not come down. Yes, PIA is cheap, but it’s not really that common. Look at the majority of altnet accounts and you’ll see the brutal reality.

      As for VM improving things after cable consolidation, they’re still not viable, despite being the second biggest national network and second largest ISP. If a company doesn’t make a credible return on its capital employed, it either makes losses until it becomes insolvent, or it runs down shareholder’s equity until it breaches loan covenants and terms, and the lenders takeover the company and restructure the finances. There’s a third option that some other entity (usually a parent company or existing investor) puts more money in, but absent drastic action that compounds the problem of value destruction.

      No matter how much some people might want altnets to be some white knight, rising to save the customer from the evil dragon of BT, all commercial companies need to make a profit, collectively the altnets cannot make a viable business on the capital they’ve deployed, and even VM remains a jam-tomorrow promise to its own investors.

    7. Avatar photo anonymous says:

      Well agree to disagree on some things.

      VM is a lost cause. It inherited debt galore from combination of previous companies merged into one. I explained some of the reasons why they had that debt. Poor service continues to dominate VM and the main reason why people leave along with extortionate price increases and changes to T&C’s. Also, the fact that they picked poor HUBS with multiple issues for customers, having to issue Wifi Plume pods which aren’t cheap, support people who constantly send new kit out rather than have ability to realise the cause of an issue is something else, ignoring situations where stuff escalates to a legal cost route. So many reasons why VM have costs.

    8. Avatar photo NE555 says:

      “I’d rather go symmetric XGS-PON with Virgin Media”

      You’re talking about a retail product that doesn’t exist today (not even in VM XGS-PON areas), and may never exist.

      XGS-PON is a technology, not a product offering. VM *could* offer symmetric services over it, but only if they choose to do so.

      Virgin Media, like Openreach, have a large and lucrative leased line customer base. They are unlikely to want to erode it.

      In addition: residential ISP provision is a low-margin, cut-throat business. Users who do a lot of uploading tend to be the ones which cost them more, resulting in lower (or negative) profit per customer. Hence I think it’s unlikely they’ll want to attract such users: it will mean higher prices for normal users, which makes it harder to complete.

      To put it another way: they’ll be more than happy for the altnets to be burned by taking on these users 🙂

    9. Avatar photo Reality Bytes says:

      ‘Virgin Media, like Openreach, have a large and lucrative leased line customer base. They are unlikely to want to erode it.’

      Are VM in with a surprise for you! Worse than the erosion of some price-sensitive customers to best effort symmetrical is losing them entirely to competition. Better to keep them handy so that they may be sold enterprise or value added services. Not all that many of their customers are sitting on a single DIA and nothing else.

      Haven’t actually replaced much DIA entirely. Seen folks downgrading it and installing broadband next to it and, mostly, moving from MPLS to DIA to widen their options.

    10. Avatar photo MilesT says:

      In some parts of North America, there are multiple providers of internet with separate physical infrastructures and profitability. Usually legacy telco (with a FTTC offer, sometimes FTTP/B/H), and maybe a wireless provider of some sort.

      However, the monthly cost tends to be significantly higher, which is why it is profitable.

      Tends to be fewer ISPs that are carried over someone else’s infrastructure. If there are fewer suppliers, the price will rise; sadly could be the end game here unless Ofcom keeps a cap on costs charged by Openreach/Altnets (and ultimately VM02) to other ISPs.

      The cable TV history in the UK isn’t entirely relevant in this discussion, given the market dominance of a solution that was cheaper to roll out (Satellite) although I think there was some monopolistic commercial abuses that allowed that outcome.

    11. Avatar photo GreenLantern22 says:

      “whether multiple competing physical infrastructures in fact offer a better overall deal for customers, or are even economically viable. ”

      Andrew I waited 18 months for Openreach to upgrade my telegraph pole, which they left as it was defective while everyone around me had FTTP. As soon as Community Fibre came and upgraded the pole, which they had no issues using a cherry picker, Openreach came running to do the same. So yes Altnets are way better for customers as they bring much needed competition. Whether they are economically viable shouldn’t be your concern, they are not using public money so why do you care if they go busted? For you they are just “rich private investors” so they should burn in hell right? Well these “rich private investors” have improved the internet connection of millions of British people, even if they die after a while why do you hate them so much?

      Your alternative of a single network is just crazy idea. For a start we already sold the network to BT so it’s late to build a new public network on top of it. That do we do instead? Give it for free to BT? No thanks. Let the government mismanage it like they do with all large infrastructure projectd which are always late and over budget? No thanks either.

      We have a good chance of ending up with 3 major networks, assuming Altnets consolidate into a big entity: BT, VM and Altnets. I already have those 3 servicing my street and I am blessed with the ability to have two internet connections in separate networks. Both my wife and myself work as contractors remotely and can’t afford to not have a connection. A single off work will cover a while year of any backup internet connection. Now you tell me how would that work in your brilliant idea of single network managed by BT. Have a read at the thread below to see what a single network does to you when it can’t be bothered to restore the service that was there before.

      https://www.ispreview.co.uk/talk/threads/no-broadband-because-openreach-refuse-to-connect-property.39488/

      Finally I am in favour of Equinox 2. The price changes are not that significant and if Altnets can’t take it then the sooner they die/merge the sooner we can have a consolidation which can get BT and VM a run for their money.

    12. Avatar photo Ad47uk says:

      Can you imagine a world with just BT(openreach) many people have only had that choice for years and a lot still only have that choice., which is not really a choice. Thankfully here people now have a choice.

      We did have a choice a few years ago, between ADSL or a wireless broadband service, sadly the wireless broadband service could not cope with the amount of people wanting to use it and closed down. I loved it, mainly because it was different and I got asked what the thing was on my roof, I still get asked as it is still up there. 🙂
      Also, I got of the Openreach network. The problem is, once bitten, twice shy, they had a lot of problems towards the end and then FTTC came to the city and that was the right step to take.

  4. Avatar photo DL says:

    Typo: Equinix

  5. Avatar photo Ex Telecom Engineer says:

    Equinox 2 isn’t anticompetitive, its part of Openreach’s business plan to encourage CP’s to migrate off FTTC, and onto FTTP as it’s rolled out. If it damages the Altnets, then there’s something wrong with the Altnet business plans. This is purely political and has nothing to do with competition concerns. My guess is Openreach will wave this through in a couple of months time, If they don’t it could result in BT taking OFCOM to court.
    As far as Jansens statements, clearly the FT did take them out of context and why should OFCOM care what Jansen says anyway, do we hear anything from OFCOM when Altnets and VMO2 verbally bash BT? Which they do on a regular basis.

    1. Avatar photo Ex Telecom Engineer says:

      Correction:

      My guess is OFCOM will wave this through in a couple of months time, If they don’t it could result in BT taking OFCOM to court.

    2. Avatar photo anonymous says:

      Ex Telecoms Engineer statement brought to you today by his investment in BT shares….

      I’ve said this before. BT don’t give a hoot about customers only the revenue from them. They offer poor customer support at expensive prices. They only do wholesale price cuts – NOT because of interest for the consumer – but to undermine less mature competitors so they can monopolise again. Some of the bigger ALTNETS have fantastic UK BASED customer support and are cheaper and doing better service offerings. BT don’t like that, particularly symmetric services that they see as (even more expensive) leased lines. These are my opinion based on my observations. All businesses want to make money, but some MILK the end customer and offer the lowest denominator in service and support, whilst others don’t.

    3. Avatar photo Ex Telecom Engineer says:

      Anonymous, this is more likely theatre than substance. OFCOM have no reason to stop this from going through, as Openreach have a good business case for encouraging CP’s off FTTC and onto FTTP. The Altnet backers, who have extremely deep pockets, should look at growing the Altnets organically, through pricing and superior service/product offerings.
      Your words:
      “Some of the bigger ALTNETS have fantastic UK BASED customer support and are cheaper and doing better service offerings.”

      If that’s truly the case, then the Altnets shouldn’t need OFCOM to hold BT/Openreach back, their business models should see them grow market share.
      Clearly CP’s reluctant to migrate customers off FTTC and onto FTTP damages Openreach’s business model, and add extra costs to the business, and that’s the likely reason OFCOM will have to wave this through.

    4. Avatar photo Buggerlugz says:

      OFCOM have every reason to stop this going through because its racketeering.

    5. Avatar photo Alex says:

      I know you’re just trolling but worth going and looking up the definition of “racketeering”.
      Better still, you could pull some actual evidence or proof together and take it to the appropriate authorities.

    6. Avatar photo Ad47uk says:

      @Ex Telecom Engineer, so what is this good business case openreach have for getting people off FTTC? The only thing I can think of is that they have a load of ISPs using their network, and they will push, talk, nag, what ever you want to cal it and people will get fed up with being nagged. Just like energy providers are doing with smart meters. The only people I see rushing for FTTP at the moment are ones that have families living in the house or need the higher speeds for stuff like downloading games. I speak to a lot of people and most of them say they are in no rush or are not going to bother.
      Openreach and Zzoomm here seem to be having problem getting people from FTTC.

  6. Avatar photo Dave the rave says:

    Isn’t it true that even with discounts, the price Openreach charge to wholesale is still more than the alt nets charge? So not sure how that’s anti competitive. And despite some of Mr Jansens comments being taken out of context, what exactly has he said that hasn’t been said before? We know consolidation is coming, the era of cheap money is over and we know that some alt nets won’t make it because of painfully low take up. Plenty of industry folks have said similar.

    1. Avatar photo anonymous says:

      agreed. Some consolidation is inevitable because some Altnets have strange strategy. Take Trooli, its failed because it’s coverage is patchy; even in areas they claim to serve, it isn’t symmetric which is a major benefit of an ALTNET over incumbent BT FTTP based services, and its pricing was usually over what BT/Openreach ISP’s charge.

      Having said that, there are some clued up ALTNETS like CityFibre, Netomnia, Community Fibre and one or two others.

    2. Avatar photo Buggerlugz says:

      Which begs the question, if Openreach is charging BT less for installs, why are BT charging their customers more? Answer: Because they can.

    3. Avatar photo Ad47uk says:

      Bloated toad have always been expensive, they think they offer a premium service and bulk it up with stuff like cloud storage and other stuff. Not sure if they have cloud storage now. They also think they are trusted by people and sadly that is true, I know of a few people who stay with BT because they trust them as BT was what they grew up with or GPO as it was as well. My next door neighbour was like that, thankfully their Daughter got them to change to something that is a bit cheaper.
      When I was on dial up, BT had a load of stuff included with their packages, the same as ADSL. I only went with BT for ADSL originally because they were the only ones doing it and they installed it for free at the time they were charging for it.

      I have said for years, even on dial up, all I want is the connection.
      If I go for FTTP I am going to go with ZZoomm, 12 months contract for a start, but they need to be more reliable, so I will get a 12 month contract for FTTC in June and see what happens after that

    4. Avatar photo Reality Bytes says:

      BT don’t charge for installs, Lugz.

  7. Avatar photo anonymous says:

    I have verbal diarrhoea today 🙂

    1. Avatar photo anonymous says:

      says the fake anonymous 🙂 A BT fan in disguise no doubt.

  8. Avatar photo Bubble's going to burst says:

    This stinks, Ofcom bowing to pressure from the Altnets.

    So the prices will remain artificially inflated to help the altnets with their flawed business plans.

    The inevitable collapse/consolidation of Alnets is simply being delayed, meanwhile investors keep pumping money in and the public are denied access to cheaper internet services.

    Altnets should be exploring other ways to be competitive and make their business viable rather than just preventing Openreach from cutting their prices.

    1. Avatar photo anonymous says:

      so you want a world of just BT and VM then?

      A number of ALTNETS are competitive, some have dubious pricing and coverage and won’t be around. Nobody said ALL ALTNETS are great.

      If you think when the ALTNETS are gone (your thinking) that the pricing won’t go back up, then cloud cuckoo land springs to mind. It’s the ONLY reason why BT want to lower them “for now” to de-stabilise competition that is already cheaper than them and better.

      The bigger ALTNETS are likely to work around BT’s tricks though – they are clued up. They can always introduce new technology at a faster rate and more cheaply than BT can. They don’t do endless trials and pilots, they just get on with it.

    2. Avatar photo It's going to go bang says:

      Many Altnets built their business plans on the assumption that if they were the first to build in an area then Openreach and others would not overbuild in the same area.

      Of course we now know this is not the case and in certain areas there simply aren’t enough customers to make it profitable.

      Everyone knows what lies ahead.

    3. Avatar photo It's going to go bang says:

      We’ve already seen Cityfibre ‘restructuring’ (basically making redundancies to reduce their overheads) and sadly it’s inevitable there’s more ‘restructuring’ to come.

    4. Avatar photo John says:

      So have BT, whats your point?

  9. Avatar photo FibreFreddy says:

    So many comments focussing on the price question, and ignoring the hefty lock-in requirements for ISPs, which is key to understanding why Equinox 2 is anti-competitive. If ISPs want these low prices they have to commit to putting the vast bulk of their orders with Openreach and staying with Openreach for years, shutting emergent altnets out of the wholesale market for a decade or more.

    There’s something like £20bn of investor cash backing the altnets right now – I find it hard to believe that these seasoned infrastructure investors have not done their risk assessments before backing what is the UK’s biggest infrastructure project.

    In reality what we’re seeing is Openreach attempting to defend it’s shrinking market share by using its significant market power to fence off large chunks of the market where it currently has copper by enticing ISPs to drive customers into Openreach fibre products as they become available. Meanwhile the altnets, which don’t have that legacy network to rely on, but who are building fibre as fast as Openreach, if not faster, are quite rightly suggesting that this tactic is not giving them the level playing field that the WFTMR was supposed to guarantee.

    1. Avatar photo Zed says:

      @FibreFreddy Actually I think you’ll find that some of the Altnet investors have been naive and thought that all they needed to do was build a network and customers would come flooding in. Now they’re finding that its not as easy as that and that brand, reputation and coverage matter. Their business cases don’t work when all you get is 10% take-up.

      You’re also mistaken about Equinox. There is no requirement for ISPs to place orders with OR. The only criteria to benefit from Equinox prices is that the ISP must not order FTTC from OR if FTTP is available in a specific location. The ISP can order as much fibre from Altnets as they like and it does not affect their Equinox offer.

      It seems to me that what Cityfibre et al. don’t like is the 30-50% takeup that OR are achieving. Complaining to Ofcom is a good delaying tactic, but what the industry really needs to do is consolidate fast, so that they can compete effectively.

    2. Avatar photo Ged says:

      @Zed Yes, I agree completely.

  10. Avatar photo Just a thought says:

    Imagine if OFCOM looked after supermarkets. Tesco having to wait 3months before a reduction ticket could be placed on their cornflakes just in case Iceland or ASDA got upset…..

    1. Avatar photo Fibre fantasy says:

      @Just a thought

      LOL, yes I thought the same myself.

    2. Avatar photo anonymous says:

      Hardly the same as none would have had the state benefit (tax payer) of original infrastructure being there and paid for. The whole thing is about enabling competition and to prevent repetition of street furniture and poles by using existing PIA where possible. That PIA cost is passed on by BT who inherited most of it. It’s supposed to prevent having just one provider and monopoly.

    3. Avatar photo Alex says:

      Ah the old “BT got given it’s national network for free” chestnut.
      Utter garbage.

    4. Avatar photo Anonymous says:

      Nobody said free, but certainly cheap.

    5. Avatar photo Just a thought says:

      Gas pipes used to be owned by the gas Council, then British Gas then Transco, now some conglomerate. We don’t have the same fuss over the ownership of the transmission network. Energy companies don’t dig up the road and lay alternate pipes just so they don’t have to pay the national transmission network fees.
      GPO, BT, BTOR, is PON not just a transmission network? Dig once, don’t waste resources. Surely the fight should be for CPs to offer better and varied services LLU style unbundled fibre options speeds and asymmetric/symmetric services over said network?

  11. Avatar photo Ex Telecom Engineer says:

    “So many comments focussing on the price question, and ignoring the hefty lock-in requirements for ISPs, which is key to understanding why Equinox 2 is anti-competitive.”

    Can you explain the lock in requirements you’re referring to?

    According to the key points of Equinox, Openreach say:

    “Single, simple CP commitment to sell GEA-FTTP where available, in place of GEA-FTTC / copper
    No volume commitments or migration targets: CPs choose the pace of migration”

    “Rental discounts are unlocked at Fibre Only Threshold, which is same as Fibre Only Target until Sep 22 and 80% thereafter.”

    In OFCOM’s Equinox 2 consultation paper, it says:

    “The Equinox 2 Offer does not contain terms which lock in ISPs, to prevent them switching to using an altnet if one later becomes available”

    I think you’re confusing incentives to encourage CP’s to migrate from FTTC to FTTP with lock in, and I don’t think the Altnets are even complaining about that. The Altnets seem more concerned with the new pricing and the overlap Failsafe Mechanism.
    What the Altnets are basically asking OFCOM to do, is prevent Openreach from setting competitive wholesale pricing, so they can poach CP’s without having to reduce their own prices, or in other words ensure that Openreach is stopped from competing.

    1. Avatar photo GNewton says:

      @Ex Telecom Engineer: Your devotion to anything related to BT is admirable, but certainly quite misplaced here. Nobody feels sorry for you when your BT shares have gone downhill over the years.

      There is fundamental difference between BT and altnets: The original BT network (ducts, poles, exchanges) was all paid for by taxpayers. And then the government had the audacity to sell this utility company to private investors, making more money, instead of giving it back to the taxpayers. As a result, the now privatized BT inherited a near nationwide infrastructure. You can’t compare BT to altnets, altnets had to start from scratch building there infrastructure, or pay for the usage of BT’s ducts/poles via PIA.

      Competing against a formerly state-owned, now privatized company, which still enjoys a SMP, does not represent a fair genuine market competition.

      The situation certainly is more complex than another simple price reduction for BT-Openreach.

    2. Avatar photo Ex Telecom Engineer says:

      “Nobody feels sorry for you when your BT shares have gone downhill over the years.”

      I don’t want anyone to feel sorry for me,I pull in good dividends and BT is clearly undervalued on fundamentals; And articles suggesting BT has £19 Billion of debt, somehow ignores the percentage of that reported debt related to Lease Liabilities, which BT chooses to account for as debt rather than an operating cost.
      No one should feel sorry for struggling Altnets either; They can either compete, or they can’t, and the ones that fail only have themselves to blame. As far as this delay, it’s more likely that Ofcom are dotting the i’s and crossing the t’s, so they can defend any decision in court. Does anyone really believe there’s a good case for Ofcom to block Equinox 2?
      The Government sold the network and it was floated on the FTSE, with BT owned by lots of small retail investors, not just big players,it wasn’t inherited. As far as the network and infrastructure assets, I’d suggest the network has gone through several transformations, like PDH/SDH/DWDM and now full convergence, so the network floated by the then Government no longer exists.

    3. Avatar photo Fastman says:

      GNewton

      you seem to forget that Virgin media got all its network which had been paid for by someone else so vm certainly did not build from scratch and most altnets are using PIA in the main instance

      your devotion to making it up s you got along is sadly unchanging

    4. Avatar photo Anonymous says:

      Fastman. What are you talking about? Vm did build their network hence why never been forced into wholesale access by Ofcom.

      They simply merged as companies, bunged Branson some dosh for using his brand name for a set number of years.

    5. Avatar photo Reality Bytes says:

      Fastman: VM is from where ntl:Telewest bought Virgin Mobile.

      They certainly both built some network and purchased the rest.

      Both used other people’s money in that they borrowed to build and acquire.

      Take home is a clear line of ownership where at every point either cash or equity was involved in each acquisition, nothing was given away.

      Same as BT.

    6. Avatar photo Reality Ducts says:

      ‘I’d suggest the network has gone through several transformations, like PDH/SDH/DWDM and now full convergence, so the network floated by the then Government no longer exists.’

      Those are all the kit either side of the fibre cable, or a bit beyond it. The duct and pole network is still there, some of the fibre is still there. Most of the copper is still there. The most valuable bit is the physical infrastructure. Without that they aren’t installing anywhere for £2-300 a premises.

      The same ducts carrying the same cables are happily transporting multiple 400G wavelengths when before they were shifting E1s multiplexed into 34 Mb E3 PDH.

  12. Avatar photo anonymous says:

    If BT/Openreach allowed to cut prices then they should do the same for PIA charges. If they are doing it for consumer interest then they won’t mind will they….

    1. Avatar photo Altnets are toast says:

      Why is that then? altnets are getting their cables rolled out dirt cheap already through PIA

    2. Avatar photo Ribble says:

      PIA causes lots of damage to the network, not all of it is recoverable.

  13. Avatar photo Dave says:

    Openreach cost per premises passed has dropped to £300 from $500. Shouldn’t wholesale prices also fall to reflect the lower capital cost element to be recovered.

  14. Avatar photo Altnets are toast says:

    Keeping Openreach’s price inflated just so altnet’s can try to get their business model to work is nuts, its not in the best interest of consumers.

    1. Avatar photo Anonymous says:

      Nice try, but having just BT and their legacy tech (GPON) and crippled service (not symmetric), poor lowest denominator of so called customer support is not in interest of consumer along with their temporary lowering of prices to try and kill competition so they can monopolise again. My take.

    2. Avatar photo Altnets are toast says:

      @Anonymous

      Nice try!!!! where is your proof or is it story telling as normal.

    3. Avatar photo Reality Bytes says:

      Having one network is not in the best interests of consumers unless it’s dark fibre.

      Without that there’s no room to innovate. Everyone gets what Openreach want them to have in the way Openreach want them to have it. No incentive for Openreach to do anything other than the bare minimum.

      The temptation to raise prices once the competition is gone would be huge. A reminder BT are a publicly traded company not a charity and have a duty to their shareholders to squeeze every penny they can from their customers and hold as high a market share as possible.

    4. Avatar photo anonymous says:

      Well you do sound like a candidate that likes a good Jackaonory story being read to them.

      If you think I am going to run off doing loads of work to post the proof then no. What part of the facts about GPON and non-symmetric about the BT/Openreach offering are you disputing? You must be less read-up about things if you dispute that.

    5. Avatar photo anonymous says:

      Reality Bytes is correct. Agree 100%

  15. Avatar photo Paula in Edinburgh says:

    Update from Cityfibre CEO Greg Mesch…

    Interesting how Greg is quick to give his response to this news, but when there’s news of his company damaging a bridge in Edinburgh, closing it for weeks, causing chaos for local residents, loss of money for local businesses, etc. There’s no message from Greg.

    Says it all really.

    1. Avatar photo Altnets are toast says:

      You noticed that as well.

    2. Avatar photo anonymous says:

      Oh yes, because BT/Openreach have been so flawless in their work over the years.

      get real.

  16. Avatar photo Letter from desparate Altnet says:

    Dear OFCOM, we’ve spent billions laying a fibre network, we’re paying our senior staff large salaries, we’re in huge debt BUT now we’ve discovered it’s not as easy as we thought to get people using our network.

    Openreach are doing OK and have a lot of people using their network, they’re also cutting their prices to offer people cheaper internet connections.

    Please help us,our investors are getting angry and expect some return on their money. Can you do something to stop Openreach doing so well as we don’t know what else to do.

    Thanks.

    1. Avatar photo anonymous says:

      Well one day they may not be so desperate as you put it. Lets hope they kick BT into the grass. They need the competition else they sit on their laurels again telling us all what we need and don’t need (remember the FTTC is superfast and is all people need argument?)

    2. Avatar photo Reality Bytes says:

      Altnets are paying Openreach for access to their passive infrastructure based on the Openreach price list. Leeches as a general rule don’t pay.

  17. Avatar photo GreenLantern22 says:

    People don’t realise but the arguments of both sides of this discussion match the difference between anti trust competition law in the US and the EU. In broad terms the US anti trust law protects the consumer from “actual” harm whereas the EU looks to protect consumer and the market broadly from “potential” damage. In the US lowering the price below cost it’s fine since the consumer “benefits” (short term at least) while in the EU is not allowed since it damages the market.
    Those who are in favour of BT lowering prices probably align themselves with the US anti trust doctrine. It’s an egocentric view but as long as I get a benefit I don’t care about others. There is no doubt that if BT had full control of their prices they will lower them to squeze the Altnets out of the market and dry up investment. They will then build up their FTTP network and raise prices. New entrants will then have a much harder uphill to climb as most people will have access to fast internet and will be less likely to switch.
    The irony of the situation we are in is that it was fully self inflicted by BT which slept for years and then chose to deploy FTTC instead of going full FTTP and thinking longer term and what’s best for the customer. Now they are going to have real competition the majority of the UK households so they will have to fight on price, service, realiability, etc. Those a much harder metrics to win on the cheap.
    I am however a realist and I know that most Altnets will probably not survive and they will have to consolidate. Hopefully under a third national network to compete with BT and VM and hopefully they will become a decent company. In the meantime I will support my local Altnets all I can, every pound I give them is a pound that BT/VM don’t get.

  18. Avatar photo Price fixing must be exposed. says:

    This is simply price fixing.

    The general public should be made aware that Cityfibre are using Ofcom as a tool to keep prices artificially inflated. To keep a flawed business plan running, lining the pockets of highly paid executives.

    If they can’t compete in the market then they should change their strategy. Look at their own marketing and sales techniques and consider consolidating with other Altnets to become stronger.

    1. Avatar photo Reality Bytes says:

      It’s regulation.

      Without regulation you’d have a choice of whatever BT wanted to provide at the price BT wanted to provide it or mobile/satellite. They’d be no wholesale, cable probably wouldn’t be a thing, altnets would be squeezed out by targeted price cuts and of course no PIA.

      What you call price fixing has been happening for decades, with various pricing regulated both upwards and downwards.

  19. Avatar photo Ian says:

    Great, thanks Cityfibre. I really appreciate you making services for those of us who have no other supplier than Openreach more expensive than they could be.

    1. Avatar photo anonymous says:

      Likewise, if BT weren’t insistent on reducing prices merely to kill off competition then put them back up and up again then perhaps you could have competition.

      Why don’t you lobby Ofcom to make PIA cheaper instead? Yes, of course BT/Openreach not doing that….

      remember BT were the first for the lovely CPI + 3.9% price increase formula every year. Says it all.

  20. Avatar photo Buggerlugz says:

    If people were not locked into contracts then this wouldn’t be an issue would it.

    1. Avatar photo Ad47uk says:

      Long contracts at that, FTTP contracts are normally 24 months, I am not going into a 24-month contract.
      The next one I get I want to be 12 month if I can, that is one reason why I am looking at now broadband.,

    2. Avatar photo anonymous says:

      Ad47uk, NOW do a month contract at same price per month as 12 month contract, currently £22 for fastest FTTC package – you just have to pay for the router cost upfront of £65. Haven’t seen them do any FTTP packages as yet.

    3. Avatar photo Reality Bytes says:

      People would have to pay install fees and higher monthly charges if there were no contracts.

      That’s what happens now with the ones offering monthly options. Can’t recover cost of installation over the course of a contract and no guarantee of ongoing income to cover the CPE so have to pile that in.

    4. Avatar photo Ad47uk says:

      @anonymous, I did not know they did monthly ones, that is useful to know, not bothered about FTTP. don’t need the router either really, I will look into that when I get home from work. Cheers.,

      @Reality Bytes, I just don’t like being locked in for long contracts, I am not fond of 18months, but that seems to be the norm for broadband unless they charge a huge amount per months and then some of the ones who charge a huge amount still have 18 months contracts.

      Zzoomm have gone to 12 month contracts on their FTTP packages, which is great, but far too many complaints about them and reliability at the moment.
      I am not going for a 24-month contract for broadband again, been there, done that, got the T-shirt .

    5. Avatar photo Reality Bytes says:

      I was talking to Buggerlugz. Well aware of your objections, AD, you’ve made them enough times they’re tricky to forget.

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