Openreach Try to Reduce UK FTTP on Demand Broadband Cancellations
One of the problems with Openreach’s quirky and expensive FTTP on Demand (FTTPoD or FoD) broadband product for UK ISPs is that it suffers from a high rate of order cancellations, which are running at a rate of around 90% following the site survey and confirmation of the build charge. In response, the network operator is changing the order and survey process.
Firstly, it’s important not to confuse the normal gigabit-capable Fibre-to-the-Premises (FTTP) service with FoD, which is a premium product aimed at smaller businesses. In a normal native FTTP rollout, Openreach foots the bill to install the optical fibre down your street, but with FoD it’s the customer who chooses to pay for the extremely expensive civil engineering side of that build (desktop quotes can run into the tens of thousands).
The advantage of FoD is that it can enable you to get a gigabit FTTP line built right to your property, even if full fibre wasn’t previously planned to be natively deployed into your area. All of this sounds great, except for the high cost of building such infrastructure and the long lead times involved, which make it far too expensive for most ordinary people. Not to mention that it’s awkwardly positioned in an area that Leased Lines also inhabit.
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As a result of all this, FoD’s future was called into doubt last year (here), although some ISPs (especially Cerberus Networks) were successful in keeping it alive. But some problems have remained stubbornly hard to tackle, such as the high rate of order cancellations. Openreach now plan to introduce a new approach that they hope may help to tackle this issue.
The changes include the requirement for a mandatory Non-Binding Estimate (NBE) to be requested by ISPs ahead of placing a FoD L2C Order, and the introduction of a new Complex Survey for FoD (this will also apply to other bespoke fibre build projects too).
Openreach’s Statement
Currently, all FOD Orders are surveyed by Openreach as part of the planning, design and costing process and the Order cancellation rate is running at c90% following the site survey and confirmation of the build charge.
Therefore, in order to reduce the cancellation rate and associated wasted costs for both CPs and Openreach, from 10/08/23, it will become mandatory for all CPs to follow the FOD NBE process, prior to Openreach accepting and progressing a FOD Order to planning and survey.
On receipt of a FOD Order, where the NBE has not been requested/completed, the FOD Order will be placed into CP delay, pending action from the CP to request the NBE. Following the NBE being provided, the CP will need to acknowledge the required budget for build and request Openreach to proceed to the FOD survey.
Furter details about the process will be shared at the upcoming CFPPG on 24/05/23.
Openreach would like to remind CPs that the FOD NBE is not binding (not capable of acceptance) but is illustrative of the Final Build Charge and will enable CPs and their end customers to understand the budget before placing a FOD Order and proceeding to survey (which is charged at £298.96 if the Order is not then progressed to build).
Openreach would like to request that CPs adopt the process change as early as possible, i.e., in advance of the official 10/08/23 process change date, with the purpose of reducing FOD Order cancellations at the earliest opportunity.
Following implementation of the change, Openreach will monitor the impact of the change against FOD Order cancellation rates.
Introduction of the Complex Survey
From 10/06/23, Openreach will offer a new FOD Complex Survey option for CPs.
Upon request, Openreach will conduct a full, detailed survey, covering the network route from the end customer premises to the serving head end exchange.
It is anticipated that CPs will request this survey where a high build charge has been quoted by the FOD NBE, and there is an expectation that a full detailed survey will result in an improved network design and an adjusted cost for the FOD Build Charge.
Naturally, this is FoD, which means that the new Complex Survey process isn’t exactly cheap – for a single order / lead site you’ll need to pay £2,932 +vat. But on the upside, adding additional FoD sites on the same Passive Optical Network (PON) to that survey process will only increase the cost by £45 per site. We can see this helping to reduce cancellations, although at the same time we suspect the changes might not do all that much to boost take-up.
Further details on all this can be found in the operator’s latest briefing document. But inevitably, the little demand that does exist for FoD is already being reduced by Openreach’s own native FTTP rollout, which currently covers 10 million UK premises and aims to reach 25 million by December 2026. Not to mention the impact of many rival network builds, and Project Gigabit’s target to reach c.99% (“nationwide“) coverage of gigabit-capable broadband by 2030.
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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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When quotes for FoD are upwards of £130K then is it hardly any surprise orders get cancelled?
The crazy thing is with Fod, when Fod was first released I literally could I have it to my house for £500. I didn’t know about it then. If I had of done I would have snatched that up faster than anything.
Then they came out with version 2 of Fod. For that I could have got it for £5000 to my house. They made a big deal of v3 changing all of their prices and all the news articles everywhere and comments on forums suggested it would go back to the first tier pricing again so held off getting a quote until v3 came live. I was shocked to be told my house was £19000 +VAT under v3 pricing.
That was Fod ended for me and had to wait 5 years for Cityfibre to do my street.
To me it’s an exercise in printing money, simples.
FOD History
Liv Garfield (ex CEO Openreach)
‘I guess the only two things to add to that is fibre on demand does go live across the entire estate, as Clive (Selley – current CEO Openreach) says, during the course of the next 12 months, so that gives you FTTP by choice, so if anybody wants it, they can have FTTP , that’s new news.’
CEO of Openreach at the Q4 results day in May 2014. From the BT transcripts
Fibre on Demand is central to BT meeting its commitments in Wales. Fibre on Demand has been identified promised and confirmed by BT as a deliverable in all of Wales. Since then a Public Account Committee (Wales) published an update on 21st September 2016 Audit Wales report, response to recommendation 2 – page 5.
http://senedd.assembly.wales/documents/s55753/PAC5-09-16%20P5%20-
It was intended to be a standard in-fill in rural, how else could BT deliver for BDUK? Without it BT could not absorb the subsidies available, as cabinets were relatively cheap and would not need much subsidy if BT’s investment was transparent.
For a brief period in the earliest days of FoD, there were a few comments made by CEOs and Welsh politicians that were, I feel, misleading given what we already knew about how it would work at the time (ancient news now ofc). But Openreach themselves did fairly quickly start clarifying it as a premium product, aimed more at smaller businesses, and that’s the way it’s been for many years now.
FoD are the biggest con ever! Biggest rip off!
the biggest problems with fod is this.
1 very high costs and the premises passed doesn’t reduce the cost that much. Prices have increased over the various iterations.
2. If i order fod (which i can’t – i got back a blank fod desktop quote). my neighbour can order wba fttp at normal prices. I get no proper clawback .
its a nice idea product messed up in OR politics.
If you’re able to involve a community, then the Fibre Community Partnerships (FCP) scheme may make more sense than FoD.
Yup CFPs are the way to go for small group installs but even that is open to abuse with people dropping out and then getting a live cbt for no outlay.
Agree Mark. FOD Community scheme worked great for my estate. It took around 12 months from start to finish but we got the numbers signing up and Openreach got it installed.
I agree. Why should I pay for FTTPoD for commercial companies in my street to then take for free? There should be a 5 year clawback where new people taking the FTTP get charged some installation costs and you get refunded if you stumped up the whole cost at the beginning.
In 2018, I moved to my property 2.3 miles outside of High Wycombe, hoping for a built-up area with fiber connectivity. Unfortunately, that was not the case. When I enquired about Fiber on Demand (FoD), I received a quote from Cerberus Network. To ensure accuracy, I paid for a full engineering survey, which showed a significant difference in price between the estimated and confirmed build charge.
The initial estimated cost was £17,100.00 + VAT, but the confirmed build charge came to only £7,575.00 + VAT. Despite this, the cost of fiber to premises still seemed high, so I held off on making the investment.
In February 2022, I was able to connect to Heybroadband, which has proven to be far superior to OpenReach. I now enjoy lightning-fast internet speeds of 900 Mbps up and down.
I am not surprised they have such a high rate of cancellation specially as it takes very long time from order to delivery, and even faster deployment of FTTP.
It’s Openreach and VT being greedy as usual.
Irrespective of which service *could* be proviided to a small business they’re being outstripped by competitors offering as good a service.
The utter bull that Bacon spouts about BT offerings in conjunction wth their cell operator EE is not only annoying as an advert but as useful as a chocolate fireguard.
Simply put, Openreach, BT and EE are (Even as standalone companies) raking in millions per annum in profit. So, instead of appeasing the shareholders and paying out huge bonuses for the top brass why not try to be actually CHEAPER than their competitors, many of which use their infrastructure to provide service.
2022 Openreach profit £357m
2022-23 BT £1.3 BILLION !
Utter utter profiteering
Hardly. BT Group’s return on capital employed for the year in question was 6.93%, and that’s at the bottom end of acceptable ranges for a blue chip communications company. Indeed, it’s barely above BT’s cost of capital at 6.0%, meaning they’re scraping a bare return.
If you object to BT being privatised, and want to roll back to the happy days of the public monopoly of the GPO, then fair enough – it’s a viewpoint even if it’s from the Jeremy Corbyn book of playschool economics. But if you agree with the concept of commercial companies then they need to earn a return on the capital they use, and if they’re not doing well enough then they’ll struggle to raise the money for future investment, although long before that the board will get replaced by shareholders.
‘Millions per annum in profit’ when you have millions of customers is really not quite the gotcha you think it is.
And Openreach’s prices are regulated – set by Ofcom.
Think your companies like city fibre Netomnia are putting this pull you pants down model to bed, and it’s going to cost SlowReach more in the long run as these new guys are going to be getting these customers
Until you take a look at Netomnia’s ACTUAL coverage in an area they CLAIM to be serving. Depending on the area, it’s VERY patchy.
Anything that is not super dooper easy peasy is left out. By that I mean, only if an existing BT duct is nearby a house/pole will they cover. If they have to put up even 1 or 2 of their own poles to hop coverage across a short distance into another road because there is no duct into that road, they just walk away EVEN if they sent letters out to that road’s customers saying it was coming and had stated “Good News, we are coming. You premise will get fast fibre” on their coverage checkers for months…..
It’s not just NO that do this. I am in talks with CF because out estate can’t get FTTP via an alt net because no one is allowed to dig up the road for boring reasons I won’t go into. Anyway said they were going to build but cancelled when they must have learnt about this problem (VM have never done the estate due to the same problem, they literally crossed the road to avoid us!
Anyway CF are now in talks with me and my provider as I live in the middle of the estate and I have a leased line rented directly from the line supplier who have agreed they can use the existing infrastructure to get here. So they might well end up putting their street cabs on the end of my path (or close to) and then going out to the estate that way via the overheads. BTO are not due to start FTTP here until 2028 which is why I shelled out for a better service until then.
There are about 110 houses on our estate – all on FTTC max so if I can nail it I am going to have a nice suprise for everyone.
I’ve been told in 3 properties that I’ve lived in that FTTP in parts of Basingstoke will not be provided to these streets as “It’s not commercially viable” and unless a I club together with other residents in my area and get FoD then we’ll need to wait for a business to get FTTP in the area which will then open it up for others.
All of the above responses came to me via Maria Miller MP on her headed note paper.
FTTP rollout is a farce and I’d not be surprised if in 10 years there are still people on ADSL or FTTC
Is this really a cancellation? Surely it’s seeing the quote and deciding not to take it up, as you might with any piece of work on your house? The end result is the same but “cancellation” suggests that if you don’t jump up and down and shout “no” it goes ahead whereas the opposite is the case.
No it is not really a cancellation
The main problem people might have is no having a clue as to when they might get FTTP as Openreach publish no meaningful data on the roll out schedule it might be 6 months of it might be 6 years
Tough sell now either way.
For most it’s either just going to speed things up a year or two or be fantastically expensive.
If the price isn’t insane you’re almost certainly being covered by a commercial rollout. If the price is insane there’s a fair chance public subsidy is coming.
Up to each individual whether skipping the line is worth the investment.
Some people just lie and say they have a Leased Line instead 🙂
To each their own!