INCA Accuse BT of Spiking Broadband Prices in Uncompetitive UK Areas
The Independent Networks Co-operative Association (INCA), which represents UK alternative networks, will today publish a new report that accuses broadband ISP BT of charging customers up to 29% more per month for the same broadband product in areas without infrastructure competition.
At the time of writing we haven’t yet had a chance to fully read the report, but INCA claims that it – taken across a full range of packages – shows how BT charge on average 25% more for the same broadband product if there isn’t a competing network provider in that postcode. In some locations, BT allegedly even sells its Full Fibre (FTTP) 500Mbps + Digital Line package at 38% higher than its lowest price for that package.
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However, INCA seems to reserve most of its criticism for Ofcom, which it accuses of implementing regulation that assists the incumbent and thus jeopardising a government-supported competitive environment that benefits consumers. The report – “Securing long-term benefits for broadband customers” – urges the government to ensure that Ofcom delivers against policy and acts in the interest of consumers by:
INCA’s Key Recommendations
➤ Improving the transparency of Ofcom’s decision making and showing how each decision delivers against Government’s policy objectives.
➤ Clearing up consumer confusion over the use of the term ‘fibre’.
➤ Incentivising large national internet service providers to use Altnet networks.
➤ Structural reorganisation of Ofcom to ensure prioritisation of telecoms and broadband as a key organisational responsibility.
Finally, the report also recommends that BT Group be split, with their physical Openreach infrastructure business (its duct and pole company) being sold off into a separate organisation without common ownership with BT. Ofcom has previously rejected this in favour of a different, and less complex and contentious, approach. At present Openreach is classed as a “legally separate” company from its parent, with its own independent identity, employees and board etc. The operator is also required to treat all ISPs equally and fairly.
INCA believes that such a change might reverse the current situation where BT, they say, as the largest retail broadband ISP in the country, has publicly stated that it will never use another network provider other than Openreach and to remove any perceived differences in conditions between AltNet fibre network builders and BT. Certainly that’s not impossible, but it might also risk delaying or damaging Openreach’s own FTTP build.
Malcolm Corbett, INCA Chief Executive, said:
“INCA considers the continued integration of the physical infrastructure parts of Openreach with the remainder of Openreach, and with the remainder of BT Group, to be the underlying cause of many of the issues identified in this report.
Enough time has been allowed for functional and legal separation to deliver and both have failed. It is therefore time for a full structural separation of the passive infrastructure components of Openreach from the remainder of the group.”
According to INCA, if the government were to adopt its recommendations, then they could provide a “critical boost to investor confidence that should lead to more than 85% of UK properties having access to full fibre broadband by the end of 2025, potentially exceeding Government’s coverage ambitions” (at present FTTP alone covers just over 52%, rising to over 75% for “gigabit-capable” lines).
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Admittedly, that’s a big assumption, although no doubt investors would start to view AltNets in a more positive light, again, particularly as many such networks have recently been struggling due to rising build costs, competition and the need to grow take-up to a viable level. But to be fair, even the likes of Openreach have faced some strain from these issues.
We should also point out that the Government’s target under Project Gigabit isn’t FTTP specific – they are more broadly aiming for gigabit-capable networks to reach “at least” 85% of UK premises by the end of 2025 (Virgin’s old HFC lines are helping a lot, but even they’ll be FTTP by 2028 too), followed by “nationwide” coverage (c.99%) in 2030 (here). Ofcom’s own coverage projection suggests that the 85% mark should be reached by around mid-2025, which will be largely thanks to existing commercial builds doing the first 80%+ (here).
Naturally, INCA represents BT / Openreach’s competition and so has a vested interest in weakening their biggest rival, although it’s also fair to say that the notion of broadband services costing more in areas with less competition is nothing new in this market (the term “postcode lottery” is often coined). One reason for that is because such areas cost more to build into and maintain, with operators needing to recoup that investment somehow.
The situation perhaps partly reflects the fact that such areas are often reflective of rural communities, or those patches of urban or semi-urban areas where delivering such upgrades can be more costly than normal. As such, it’s not unusual for the delivery of services into these areas to be priced higher, which is not merely an issue of competition – we’ve seen plenty of rural focused AltNets charging more than their urban counterparts too.
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However, on this point, INCA’s report does cause some confusion as one example they gave us was between two fairly urban locations. Upon checking, both locations had access to at least 2-3 gigabit-capable networks. A second postcode example was then supplied that made more sense as it was in a rural area, where only Openreach’s FTTP was present. But after checking, we found this was for a new build homes site – those can be a bit of a special case. In total, we’re told that tests in 62 postcodes were used to create the report.
Finally, when looking at this topic, we think INCA would have been wise to remember that there are hundreds of other ISPs on Openreach’s network (the prices they charge ISPs for FTTP have no geographic discrepancy), often via a variety of different wholesale suppliers (e.g. Talk Talk Wholesale, BTWholesale etc.). Taking a deeper dive here would thus help to establish whether the pricing disparity is restricted to specific providers – competition in this market is a lot more diverse than just BT.
In fact, we often find it difficult to pin down BT’s own consumers prices ourselves due to issues of A/B product testing, periodic regional/localised pricing discounts and affiliate offers – meaning that we sometimes get 3-4 different prices for the same product across different postcodes, which irrespective of local network competition. Suffice to say, there’s a risk that this could have also polluted or confused INCA’s data.
BT Spokesperson told ISPreview:
“The UK broadband market is highly competitive. Even in areas where Openreach is the only network provider, there remains huge competition at a retail level, with over 600 companies able to provide services over their network.”
As it stands, in 2021 Ofcom gave Openreach a “fair bet” (here) to encourage their investment into rolling out FTTP more widely by pledging some regulatory certainty, at least until 2030 (i.e. softer regulation to help foster deployment). Put another way, we think it highly unlikely that the regulator will fundamentally change their approach anytime soon.
On the other hand, INCA probably has one eye on Ofcom’s next batch of market and strategic industry reviews. Not to mention the fact that a different government may be elected in the not-too-distant future, which may or may not usher in a more receptive set of ears. Getting a first mover advantage in that debate won’t do INCA any harm.
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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If they need proof of BT abusing their local monopoly power, they can ask me! I live next to an exchange, and am stuck with BT ADSL at £31 p/m!
Other providers are available for less than £20 per month
Are you sure? You actually have a line maintained by BT (retail) or a line provided by Openreach where they refuse to sell access to anyone other than BT?
If that is true then calling your position unusual would be a gross understatement.
On the other hand, if your property only has access to ADSL (but you have the possibility of buying it from any number of internet providers albeit all using the Openreach network) then that is not at all unusual but is becoming less so. Unfortunately it takes time to roll out new technology.
If internet access is important to you then I’m sure there are options to give you faster speeds but I’m guessing that it isn’t important enough to you for you to pay for those options?
@Dassa There are other ADSL OR options but not appealing to me. My previous provider was TalkTalk (horrible), the other option is Shell, which is a no go. Sky dropped out & Plusnet are the same price. 5G routers I thought about but they are quite expensive. I WFH using my phone as a hotspot
So not a monopoly then?
Isn’t this report inherently flawed by the conflation between BT and Openreach?
BT can charge whatever it wants at a retail level, within certain limits. It is never a monopoly, and the fibre networks (C and P) have enabled people to get services from ISPs that they never could get on ADSL due to a lack of LLU presence at their local exchange. Effectively every FTTC/P address becomes “market B” in old money.
It’s hard to see how it’s not just their usual list of grievances, especially the one where they want to force ISPs to use altnets.
I would hazard a guess that Virgin Media do something similar, in terms of the generosity or otherwise of both their new customer, as well as retention, deals, in areas where they are dominant.
VMO2 announced, during their Q2 results call, that they vary their retention offers depending on level of competition in a specific area. If there’s no competition you’ll not get an offer. Openreach have national pricing, which does not change dependant on levels of competition.
First Cityfibre (and others) complain about BT Openreach cutting prices, now INCA complain that their prices are too high!
If you read the actual report there is no contradiction. They are not really complaining about the high prices but the low ones. The gist of the report is that they don’t like BT/Openreach competing back and would rather Ofcom rigged the market in their favour by making it harder for Openreach to compete.
In INCA’s utopia “more competition” means more competitors to Openreach making more profit for their investors. It doesn’t mean lower prices for consumers. But they are a lobby group for altnets, so what would anyone expect.
As mentioned in the article the Openreach FTTP rollout supports many different ISP’s, so BT have competition nationally. If BT are charging more for their Broadband packages in non Altnet areas, then you’d expect BT would lose business to other ISP’s using the same Openreach access network.
The debate about BT splitting off their Duct and Pole infrastructure, into a seperate company, has been ongoing over the last 5 years, if it was easy to achieve I suspect OFCOM would have forced it through already.
The data given is meaningless and does *not* support their argument in the slightest.
“Maximum price found in postcodes where there is no infrastructure competition”
needs to be compared with
“Maximum price found in postcodes where there is infrastructure competition”
Similarly,
“Minimum price found in postcodes where there is no infrastructure competition”
needs to be compared with
“Minimum price found in postcodes where there is infrastructure competition”
And really it would be more useful to compare median or average prices in those two areas. I suspect INCA’s argument would evaporate.
Well, last I checked there are about 1.7 million postcodes in the UK.
Taking a sample of 62 seems disingenuous at best and purposefully misleading at worst.
The way described in the article makes it look like there are some seriously flawed methodologies at work here and does nothing for the study’s credibility…
That screenshot shows maximum price in one place compared with minimum in other places. Tells you nothing, other than maximum is higher than minimum.
But it serves its purpose for INCA. It will be credulously reported by the tabloid press, and believed by many people who don’t understand any of the method faults. And thus the big bad wolf story stays alive, with a picture of a starving altnet investor and accompanied by tragic violin music.
I’ve seen some dodgy data and ‘reports’ in my time but this takes the biscuit.
Self serving, selective, misleading and myopic garbage.
What utter rubbish from INCA.
BT Open reach might be the only network in some areas, but they’re not the only ISP.
Obviously just trying to throw some dirt at BTO.
Yes and totally misleading
BT Consumer has national pricing. All ISPs are free to make introductory offers. Plusnet is currently under cutting BT Consumer and EE with Full Fibre 74 with £29/m .
INCA member F&W ISP Hey! Broadband are offering 150 symmetrical for £21/m (varies daily and by postcode).
So what are INCA concerned about, perhaps its OR’s progress or that Cityfibre have spent a fortune on their own infrastructure and who’s contractors have made a right mess.
If there is any unfairness its that those on ADSL and VDSL are currently paying disproportionately for the level of service which is a reflection of the cost of keeping the copper running and encouraging people to migrate FTTP (including to INCA members)
I admit I don’t much about INCA but would like to know who funds them?
Let me guess, is it Cityfibre amongst others?
Are they really ‘independent’ as their name suggests?
I smell a rat.
Literally the first thing in the article is a link to the INCA website.
Analysis has found Walkers crisps are consistently sold at a higher price in rural corner shops, when compared with costs in large supermarkets where there is competition from Tesco and ASDA own brands.
Source: Pete’s News and Snacks, Uddleminster
National crisp brand Seabrook’s said the crinkles in their crisps were a superior technology giving greater surface area per crisp unit. However, they would prefer it if corner shops were mandated to sell their brand.
Aldi have so far refused to comment.
Aldi would refuse to comment, their crisps are very disappointing. If you want economy crisps that are at least tolerable, it’s Lidl.
It really is a strange report. Altnets consistently congratulate Openreach for running PIA very effectively. eg in the recent Zen YouTube with Community Fibre’s CEO Graeme Oxby he said “PIA works really well” and “we’re pleased with it”.
It’s clear that the report has only been produced to muddy the waters and confuse those that don’t understand what’s going on in the industry. INCA will do anything to try and slow down and obstruct Openreach.
I prefer the more positive approach taken by real industry leaders such as Community Fibre’s Oxby or Netomnia’s Jeremy Chelot.
“➤ Incentivising large national internet service providers to use Altnet networks.”
How is this Ofcom’s problem? If Altnets are failing to attract national partners it’s their business which is the problem.
As for the rest, Openreach has the same pricing everywhere so there will be other ISPs competing on that network with lower prices.
I am glad that INCA’s new report ‘Securing long-term benefits for broadband customers’ has excited interest and comment from the ISPReview community. The genesis of the report is concern that Ofcom’s recent decision-making is not fully aligned with government policy supporting infrastructure competition. Since the publication of the government’s Future Telecoms Infrastructure Review which laid out the policy of supporting infrastructure competition, we estimate approx £49bn of investment has been committed, of which £24bn is being channeled through the altnets. The UK has moved from being a full fibre laggard to one of the fastest growing full fibre markets in the world. This is a tremendous success story, but one that is threatened by regulatory uncertainty.
As part of the preparation for the report we commissioned FDM, a specialist telecoms research agency, to compare prices in a snapshot of postcodes where there is infrastructure competition against national pricing from BT and a few other major providers. We acknowledge that the postcode sample is small, but the results are compelling. In areas where there is competition, consumers benefit from significant price reductions, not just from altnet offers, but from regional pricing offers from the more traditional service providers like BT. BT is recognised by Ofcom as having ‘significant market power’ and as such the prices of its infrastructure arm Openreach are regulated (and subject to recent concerns regarding the Equinox schemes). BT’s retail ISP pricing is not regulated. We make no complaint about this, nor about the regional pricing offers, but simply point out that competitive infrastructure is beneficial to consumers – better choice, better pricing, and often better customer experience as evidenced by Trustpilot scores.
We go on to make a number of recommendations that we think will help secure this UK success, including:
– Improving the transparency of Ofcom’s decision making and showing how each decision clearly delivers Government’s policy objectives
– Clearing up consumer confusion over the use of the term ‘fibre’
– Incentivising large national ISPs to use Altnet networks
– Structural reorganisation of Ofcom to ensure prioritisation of telecoms and broadband as a key organisational responsibility
– Structural separation of BT’s physical assets from the rest of the group, to ensure a genuinely level playing field in the utilisation of assets common to the whole industry.
INCA itself is a trade association funded entirely by membership fees (see INCA’s website for fee levels), plus commercial sponsorship for our events. Our members include large and small altnets, suppliers, local authorities and a number of professional services firms. We do our best to bring together organisations with a variety of viewpoints and to represent all interests as fairly as possible.
You can download the report, including a summary of the FDM pricing research at http://www.inca.coop
Malcolm Corbett, CEO, INCA
The results are not “compelling” at all.
You’ve wasted your money on this report in an attempt to throw enough poo poo in the hope that some of it sticks.
You have no issue with your members doing the very thing you are attempting to lambast BT Retail for, that’s completely hypocritical Malcolm.
Malcolm, thanks for the detailed explanation.
However, even though you have the word “Independent” in your name doesn’t mean you really are independent, especially as you’re funded and spinsored by the companies that you’re supporting and you’re not funded by the company you’re attacking.
It’s almost as bad as the ISPA Awards where companies sponsoring the event are guaranteed an award.
Come on, we’re not stupid, please don’t insult our intelligence.
£7,000 a year to be a member/support you/sponsor you.
So obviously you’re not going to say anything detrimental about the Altnets supporting you are you?
It’s obvious why you’re throwing mud at BT Openreach. That’s what you’re paid to do!
I always thought that INCA were a serious and credible organisation, but after reading this report, I take it back. Absolute rubbish.
Unfortunately you can’t keep blaming Openreach. Alt nets need to take a look at themselves.
@Matthew
You do realise that BT Consumer are totally different to Openreach? Because going by your “research” I don’t think you do.
And that on the Openreach network any of the 600 none BT ISP’s are free to offer what ever priced service they like anywhere within the UK?
Also many of your INCA members sell to those same ISPs who charge different prices by area, underlying network or whatever else they feel like. So your members are as bad in those cases for enabling such practices. Looking forward to your press release decrying INCA members for such anti-consumer behaviour.
In note Malcolm didn’t mention what is probably the most controversial recommendation in the report:
– Government should issue a statement to confirm that its policy of infrastructure competition means that there will almost certainly be locations in the UK where Openreach will not be present in the future
Perhaps I could propose another recommendation:
– Government should issue a statement to confirm that its policy of infrastructure competition means that there will almost certainly be some altnets in the UK that fail because their business plan and execution were not good enough to succeed in a competitive market
Worst article ever. Full of wrong statements.
– I work in the industry, although BT is on the expensive side of the market, we have NEVER seen Full Fibre 100 at £44, not even in postcodes with no competition. So you are stating fake numbers.
– Prices in areas with Competition are discounted from standard prices. It means that prices are CHEAPER in competitive areas. But you are stating that BT charges MORE. That’s an altered, wrong version of the real story.
So glad you published it, you just lost credibility in the industry, congrats!
Same for those still stuck on ADSL.
The choice of ISP gets less and less every year while the price goes higher and higher.
£40 a month for a 3 Mbps connection is typical in West Devon.
Perhaps INCA could get one of their members to build in your area. Just a thought
@Malcolm Corbett CEO of INCA.
I think you’ve got the message loud and clear.
People don’t believe your misleading waffle.
It was like that anyway with different areas, something to do with competition, so the more competition you had in the area, the cheaper it was. I thought that was still an ongoing thing.
Never thought it was right, at the end of the day providers should charge the same where ever you are.
Even for INCA, this report is remarkably thin, extrapolating from a tiny number of data points to make some sweeping assertions, most of which are unsupported by the data. An alternative take would be that consumers generally benefit from competition and so INCA members really need to pull their collective finger out to deploy more quickly, following the example set by Openreach.
If Malcolm Corbett and co dislike differential pricing, wait until they survey supermarkets, petrol stations, car retailers etc!
The bigger issue is when FTTP is cheaper than xDSL, and the ISP deliberately hides FTTP pricing in non FTTP areas to hide the poor value.
£45 for 100mbit is ok, £50 for 40mbit is not.