VIDEO – Quickline and Zen Internet CEOs Debate Openreach FTTP Price Cuts
The debate over whether or not Openreach’s proposed “Equinox 2” discount scheme for their Fibre-to-the-Premises (FTTP) based broadband ISP products is anticompetitive has just been well summarised by the bosses of broadband ISP Zen Internet and Quickline, which in a new video argue from different sides of the fence.
At the end of last year Openreach revealed that it would introduce another round of wholesale discounts on their full fibre products from 1st April 2023 (here), which would help ISPs on the same network to stay competitive with newer and often cheaper alternative networks (Summary of UK Full Fibre Builds). Lower prices could also boost take-up by consumers and thus aid the move away from copper lines.
However, more than a few rival networks viewed the move as being anti-competitive (here), with CityFibre even lodging a Competition Act complaint with the Competition and Markets Authority (CMA) and Ofcom (here). Ofcom provisionally ruled in February 2023 that Openreach’s new offer was “not anti-competitive” (here), but in March 2023 they opted to impose a two-month delay on Equinox 2’s implementation after identifying “issues which require further assessment“.
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Yesterday’s debate at the Connected North event in Manchester helped to underline the divisions over this, as the CEOs of Zen Internet (Richard Tang) and Quickline (Sean Royce) argued both for and against the proposed discount scheme.
Just to give this some context. Zen Internet is an ISP that uses both Openreach and CityFibre’s networks – nationally, while Quickline is an ISP that is also building their own FTTP network in Yorkshire and Lincolnshire. Needless to say, the 8-minute video provides a useful and polite summary of the different views. In case it wasn’t obvious, Richard argues in favour of the discounts, while Sean is opposed (Zen’s position here is of most interest, given the rival networks they harness).
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, BlueSky, Threads.net and Linkedin.
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Why wouldn’t an openreach reseller want openreach to charge him less? Why wouldn’t an altnet want the main opposition to keep high prices so he can compete better? Two obvious positions to hold
In fairness Zen use multiple networks, not just Openreach. They benefit from healthy competition between networks too.
Coverage on cfh is significantly less by a huge margin. You’re talking like 90% OR to 10% cfh. They will prioritise a cfh connection over OR but this is very limited. So, of course they will be in favour of price reductions.
FTTP take is not as fast as many Altnets need it to be.
I believe it’s because the majority of households simply aren’t ready for it, don’t really need it yet and don’t want to pay for it.
On to of that were living in a cost of living crisis.
Meanwhile some business people are trying to stop Openreach reducing their prices.
How is keeping the prices higher going to improve take up?
They want to keep the prices artificially inflated to try and help keep their flawed business models afloat.
Exactly this ! Anything telecoms is not a quick
quid its always a long term investment
FTTP take up is not as fast as openreach want it to be either, that is why they will force people onto it at some point and that is the thing, Openreach can do that, Alt nets can’t.
I noticed another house have gone for Zzoomm up here, that is good, one less for Openreach.
Price wise, not a lot of difference now between FTTC and FTTP unless you can get a good deal on FTTC. Sure if you are only going to stick with the lower speeds of 36Mb/s then there is no real reason for going to FTTP unless your FTTC is awful. What people have to look out for is the prices after discounts, certainly now with most providers pushing people into a 2-year contract.
I have said it before, it seems as it people who post on here want to get rid of alt nets and just have openreach, that would-be a bad idea,
@Ad47uk
Believe it or not for a lot of households speeds of 36Mbps are fine.
UK is not ready for FTTP unless it becomes cheaper.
@Roger, I never said 36Mb.s was not good enough for some people, it is good enough for me, this is why I am not bothered about going to FTTP myself.My point was if you already have a good 36Mb/s FTTC connection, then it is not worth changing to FTTP.
U.k is certainly ready, certainly more so for people who have naff broadband and I know some people who do, as they are a long way from the cabinet. Prices are not too bad.
It should be reported in the normal news channels to the general public that Openreach are attempting to reduce the price of FTTP connections, meanwhile companies like Cityfibre and other Altnets are trying to keep the prices up.
Considering we’re in the midst of a cost of living crisis and many people are feeling the pinch, the general public should be made aware of what’s going on and let’s see their reaction.
I think you missed the point.
It is not that other providers want to keep the price higher, what they are saying is that other networks, Alt nets can not compete to the huge monster openreach is, their tentacles reaching out over the U.K.
openreach have had it easy for far too long, with very little competition and the network virtually given to them, where they have been able to charge what they like for far too long and have been supported by public money.
No doubt we will get the openreach fan boys coming back to this.
Ad47uk, is anything you’ve stated relevant to OFCOM’s Equinox 2 decision? The Government sold BT to the public via a stock market listing, including all the network and staff, so no part of it was free.
Vodafone have invested significantly, over £100 Billion, building a German business, imagine how many times they could have Fibred out the UK with that sort of investment. Why is Telecoms any different to any other industry? If a new player wanted to compete against an established manufacturer, they’d build a factory with new more efficient plant in order to undercut the other company’s business; If the established player then decided to also build a new factory to nullify the new entrants advantage, is that anticompetitive? The Altnets asking OFCOM to hold back the pace of CP’s transferring from FTTC to FTTP is clearly unfair on BT/Openreach, as they’re rebuilding their access network from scratch with massive investment; The fact that Openreach can do it cheaper than the Altnets is also irrelevant.
@Ex Telecom Engineer, oh no, it is unfair to Openreach, i fell so sorry for them., as I said they have had the run-of-the-mill for many years, well BT have anyway, before we had competition in the phone market this was before mobile phones and the internet. openreach should be sold off, but sadly there are too many fingers in the pie.
I love it when Ad47uk comes out ad nauseam with the lie that the network was “virtually given” to BT.
I’ve challenged him before to say how much was paid for the network and how that converts to current day prices but he just seems to ignore that. I’ve no idea why….
Unfortunately for him it just shows how little he knows and shows him up for what he is.
@Oggy, It doesn’t matter about current day prices, what matters is that they had the network for virtually nothing at the time and have had years to make money from it with over charging, something that BT still does.
Openreach needs to be separated from BT, need to be sold off.
The only reason Openreach is spending money now is because they have to, they have to compete and their network have been crumbling for years. The cables from the pole to my house was supposed to have been sorted 20 years ago, but nothing have been done, I am shocked I am able to get the internet speed I do.
Still going on with the lies!
You’re a very sad sad person.
@Oggy, the problem is you have blinkers on and can’t see what Openreach is. I presume you have shares in it, which is why you support it.
as I said, Openreach needs to be sold off and separated from BT, but people in government have their fingers in the pie
Sean Royce didn’t present any argument explaining why Equinox 2 is anticompetitive, whereas Richard Tang presented his arguments in a clear and concise way. Sean Royce’s argument listed irrelevances, like BT’s purchase of EE and their foray into TV sports channels, which may or may not have delayed the Openreach Fibre rollout, but is that relevant to the current situation?
The Altnets appear to be asking OFCOM to stifle Openreach’s attempts at encouraging CP’s to move customers off FTTC, and onto FTTP,in areas where Altnets are yet to roll out, probably because they know it’ll be harder to encourage switching for customers already on Fibre.
Everyone knows what’s really going on.
The market is overcrowded, take up percentages are low, the altnets are struggling and coming under pressure from their investors, consolidation is inevitable.
The alnets, rather than admit that things aren’t going to plan and they got their sums wrong, are trying to keep prices up in an effort to make their businesses viable and profitable, at the expense of the consumers.
UK consumers want lower prices for FTTP. That is one of the key factors that will drive the take up of FTTP.
That is exactly what Openreach are trying to do.
But Cityfibre and other Altnets want to keep prices higher. How is that going to increase FTTP take up?
It’s obvious their business plans are flawed and they’re desperately trying to fudge the system to make them work.
If they can’t be competitive whilst remaining viable/profitable then they must merge, consolidate or sell up to cut their losses.
Consolidation is the only way the Altnets will become bigger/stronger and be able to compete with Openreach.
Consolidation is inevitable, they’re just trying to put it off for as long as possible while the investors wait for the key moment to sell up and maximise profit or minimise losses.
Ask the British consumers what they want… Cheaper or more expensive FTTP?
I guess we all know the answer, not really difficult is it?
Problem is Cityfibre don’t want you to have cheaper FTTP otherwise their business model won’t work.
They’ve got fat cats to feed.
But prices are not too bad now, depending on where you go, but the 24 months contracts people are being pushed into is the main problem.
Someone one I chat to now and again when they past my house live a few roads away from me, and they are on FTTC, but they have awful speed issues, lucky to get to 10Mb/s their provider say it is to do with the condition of the cables and the distance they are away from the cabinet, so they are going for fibre, they would have gone for Zzoomm, but they don’t need the speed, so they are staying with Vodafone, they are getting 67Mb/s and Vodafone gave them an offer of £25 a month., That is more or less what they are paying for their FTTC service.
They said if they could get a decent speed on their FTTC service, they would not be going to FTTP.
i can get FTTP of 150 up and own for £29 a month, that is more or less what I am paying for my FTTC 36mb/s service. Granted that is with an altnet. But if i can get FTTC 36Mb/.s at a decent price I will stay as I am, I don’t need higher speed.
People think I am against FTTP, I am not, FTTP coming here is a great thing, for people who need it. I do have issues with it, mainly the fact that once on it, people may forever get emails and letters trying to get them to go to a higher speed. Also if on a different network, it will be more difficult to change.
The honeymoon period is coming to an end.
Altnets have had 4 years to build and gain market share and many have failed drastically.
Interest rates are biting and investors are getting nervous.
The incumbent is reducing its build costs and gaining market share hand over fist.
Consolidation is inevitable and many investors will loose out .
I agree completely.
ThinkCX forecast that during 2023 we’ll see a frenzy of mergers and acquisitions (M&A) among the altnet community.
Interest rates are going up again soon, putting even more pressure on the Altnets who have massive debts and aren’t making profit yet, such as Cityfibre.
This is on top of the overcrowded market, higher than expected build costs, poor take up percentages, etc.
It’s going to be a tough year for Altnets, the quicker they consolidate the easier it will become for them.
Interest rates are going up again soon, putting even more pressure on the Altnets who have massive debts and aren’t making profit yet, such as Cityfibre.
This is on top of the overcrowded market, higher than expected build costs, poor take up percentages, etc.
It’s going to be a tough year for Altnets, the quicker they consolidate the easier it will become for them.
4 years is not that long, in many places they have had FTTP for less time than that, like where I live, we had FTTP laid late last year. A lot of people will stay with what they have if it works for them, they need an incentive to go to FTTP and if they are not using what they have now to it full potential then they have no reason to move.
Take my next door neighbour, they don’t stream, I have said they should, but all they do is watch stuff on the main channels and will watch the odd thing on a Sky channel, I think to be honest they waste a lot of money on sky, something they don’t really use. Anyway, the most their broadband is used for is a tablet and their phones and maybe a bit of music via Alexa. So they have no real need to get FTTP. One of my brothers, he does stream a bit, uses his computer to browse and that is it, so again have no incentive to update
No doubt lots of people use their broadband the same way.
Myself, I use my broadband a lot, with smart home stuff, a fair bit of video streaming, browse and that sort of thing, even use Discord. Play the odd game, but not normally multiplayer, will download updates for them. But still no incentive for me to go to FTTP.
I see that some providers including Plusnet are trying different ways, but trying to price FTTC more than the lower speed FTTP, or now putting FTTC as a 24 month contract to match up with FTTP. But what they will do is annoy people, and they will go elsewhere, maybe that is what they want. But that is not incentive,
Now broadband offer 12 month contract for FTTC and at a good price, Where I am I can get an Altnet FTTP, that is a better price than Plusnet, and a better network.
They need to give people a reason to move to FTTP, not by putting prices up on FTTC, but by giving people a real reason to change to FTTP and for many there is no reason.
@Ad47uk
You say ‘they need an incentive to go to FTTP’…
Surely making it cheaper is a good incentive, but unfortunately Cityfibre and other companies are trying their best to prevent that and are actively trying to keep the prices higher.
@Emma
Yes, making it cheaper is a good incentive, but what openreach want to do is use their size as the advantage to make them so cheap that no other network can compete.
Openreach has a huge advantage in so many ways over alt nets, one being their size, the other is that many people are already on the network due to FTTC and ADSL, so all openreach have to do is get the ISPs to push people to FTTP.
At the moment, what I see is ISPs increasing FTTC prices, so FTTP looks cheaper, Openrerach reminds me of sky in so many ways, using their size to knock out other companies. Sound like Intel
You say ‘they need an incentive to go to FTTP’…
Surely making it cheaper is a good incentive, but unfortunately Cityfibre and other companies are trying their best to prevent that and are actively trying to keep the prices higher.
I don’t feel comfortable with this issue.
Maybe it’s just me, but why should Cityfibre (and other companies) be allowed to put pressure on Ofcom to prevent Openreach reducing their prices?
Cheaper FTTP prices is key to increasing take up and giving people a better deal.
Why should British consumers pay a higher price for FTTP just because some network builders have a flawed plan?
In my opinion this is not right.
The handful of shills that a recycling through usernames to post the same hackneyed drivel on these altnet posts are getting really tiresome.
It’s very interesting how you clearly see people polarising themselves in each side of the argument yet it’s very hard to see someone with a balanced view these days. The truth is that both sides of the arguments have good points and it’s pretty imposible for people to agree where should the line be drawn. This is not a binary problem, neither Equinox 2 will kill Altnets not save them if not implemented. Same for Openreach either way. Like Brexit there are too many variables at play so it’s pretty imposible to predict the outcome and even if agreed on predictions we would know for sure if the other option would have been better. These days you can find or make studies to back any opinion. So where do I stand? I rather err on the side of competition and let Altnets have some anticompetitive advantage to let them grow. Why? Because we know what happens when we let BT sit and their duopoly with VM. And we know that BT can take it whereas Altnets are in a more precarious situation. Besides I don’t really buy BT’s argument of FTTP being cheaper than FTTC since at the moment they are maintaining two networks, old and new. Yes FTTP might be cheaper to provision and maintain but those savings will only realise AFTER the copper network is officially decommissioned. In the meantime most areas continue to be able to order both FTTC and FTTP (if available) which means that as people move from FTTC to FTTP the cost of maintaining the FTTC will rise and FTTP prices will actually need to go up to subsidise the FTTC network.
Good post man.
My problem with artificially keeping OR prices high continues to be that it’s likely costing me money because I don’t have a choice for FTTP and it looks like that’s not going to change anytime soon.
If they’re going to continue this practice without any sign of change then I’d like to see something to at least try and compensate those in a similar position to my own e.g. a rebate/money off.
Yes I know it wouldn’t be perfect, but it’s better than what we currently have.
Do you think Cityfibre (and the other companies trying to stop Openreach reducing their prices) really care about British consumers paying a higher price for their FTTP?
They care about nothing else other than making profit and keeping their investors/owners happy.
This should be exposed in the mainstream media/news channels so the general public know what’s going on.
There are a few providers on the Openreach network that don’t have Sky high prices, you need to look around.
@ad47uk
Obviously I shop around, but I’ve still regularly seen better/longer deals on alt nets. Even something like £10pm difference is still £120py
@tech3475, oh yeah there are better deals from Alt nets, Zzoomm who we have here seems to beat all the other in prices for what they offer, that is if super-duper speedy internet is what you want.
Zzoomm 150/150 is £29.95 a month, the first 3 being £19.95, 12 month contrtact. Plusnet 145/80 is £36 a month, 24-month contract, they have got an offer of 300/50 for £29 a month, but again 24-month contract.
I noticed other providers are in the same price range.
i can stay as I am with plusnet on the FTTC 36Mb/s, for £24.99 a month, but for that price they want me to sign up for 24 months.
I am starting to think about going to zzoomm,because it seems to be the best value.