BT and Virgin Media O2 in Competition Spat Over £50 UK Broadband Discount

Remember when Openreach (BT) recently announced that it was going to give broadband ISPs on its network an extra £50 rebate for winning incremental new “full fibre” (FTTP) customers in areas where it competes with Virgin Media (here)? Well, the latter isn’t very happy, naturally, and has accused the incumbent of trying to “choke” off competition in the market.

“From 1st October 2026, in addition to the national Incremental New to Openreach customer offer, Openreach will give providers an extra £50 rebate for winning incremental new FTTP customers in areas where it competes with Virgin Media O2. The offer only applies to customer wins above baseline levels, so it’s designed to drive genuinely incremental new end customer wins,” said Openreach’s briefing at the time.

The somewhat controversial discount was announced by Openreach at the start of June 2026 alongside a number of other incentives, all designed to boost take-up of their Fibre-to-the-Premises (FTTP) broadband lines among partner ISPs in an already highly competitive market. But the CEO of Openreach, Katie Milligan, later acknowledged that they were also trying to “test the waters” of Ofcom’s new market regulation via the recent Telecoms Access Review 2026 (TAR) changes.

Ofcom are currently consulting on the new discounts, which are a positive development for consumers, but which rival networks will clearly want to raise a few concerns over. The Telegraph (paywall) highlights how VMO2 is particularly upset over Openreach’s targeted approach and they may have a point.

Lutz Schüler, CEO of VMO2, said:

“For many, [the TAR] was seen as a welcome sign of Ofcom providing stability and being prepared to keep the incumbent in check. For BT, it seems Ofcom’s conclusions were heard as a dinner bell to start feasting on fibre challengers as it launched a platter of hefty discounts.

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Ofcom should approach these offers as a serious threat to the emergence of long-term network competition, not as routine pricing proposals.”

Katie Milligan, Openreach CEO, said:

“Ofcom has said that Openreach should be allowed to compete, and we agree … We realise competition is tough for some but, like any business in a competitive market, we regularly develop offers to support customers and investment. We’ll continue to compete hard, but fairly, and our track record shows we consistently follow the regulator’s pricing rules.”

An Ofcom spokesperson said:

“We are assessing whether any of these offers raise competition concerns that require intervention, and are carefully considering all responses to our call for input. We will publish our consultation later this month.”

Suffice to say that VMO2 would like Ofcom to block Openreach’s proposed discounts and warned that the regulator would be setting a “dangerous precedent” if they allowed it. The move has come at a particularly sensitive time for VMO2, which via nexfibre is in the process of trying to acquire rival network operator Netonmia for £2bn and has pledged to build a more significant scaled-wholesale competitor to Openreach.

The aforementioned deal is currently subject to a sensitive competition review (here), but the CEO of rival network CityFibre, Simon Holden, warned that the proposed agreement could “significantly reduce competition and the choice available to consumers, as well as force hundreds of thousands of Netomnia customers back to VMO2” – potentially raising the prospects of the UK returning to a duopoly between Virgin/nexfibre and Openreach.

One other challenge is that, so far, VMO2/nexfibre have not been able to attract any non-group retail ISPs to their growing consumer wholesale network, despite plenty of effort (example). The competition watchdog (CMA) will be taking factors like this into account as they review the deal, which could have consequences for their final decision. Ofcom’s recent £28m fine of VMO2 for customer service failings might not have helped (here).

As usual, all the main players will be speaking from the position of their own vested interests, which is something that Ofcom will have to balance before reaching their final decision on Openreach’s new discounts.