Ofcom Propose to Block New Openreach UK FTTP Broadband Discount UPDATE2

The UK telecoms regulator, Ofcom, has today, for the first time, provisionally proposed to block one of several network discounts that network access provider Openreach (BT) had proposed to introduce in order to help them stay competitive and attract new customers to their full fibre (FTTP) broadband lines. But the separate £50 rebate offered in Virgin Media areas got a pass.

Readers might recall that Openreach notified Communication Providers (broadband ISPs etc.) about a bunch of offer extensions and new discounts for their Fibre-to-the-Premises (FTTP) lines back in June 2026 (here). Several of these were targeted at New‑to‑Network (NTN) services, which usually means a property (house, flat etc.) where there has been no Openreach products and services on the relevant line at any point in the last 90 consecutive days prior to the date of the FTTP order (excluding any premises on ‘New Sites’, like new build homes).

Several of the new discounts were widely viewed as being somewhat of a test case for Ofcom’s new market regulation under the recent Telecoms Access Review 2026 (TAR) changes. This requires the regulator to take a deeper dive into the promotions that Openreach runs in order to better assess whether or not they’re fair or discriminatory.

One of the discounts, which gave broadband ISPs on its network an extra £50 rebate for winning incremental new “full fibre” (FTTP) customers in areas where Openreach competes with Virgin Media (VMO2), naturally caused plenty of anger within VMO2 (here). Lutz Schüler, CEO of VMO2, recently warned Ofcom to “approach these offers as a serious threat to the emergence of long-term network competition“.

Ofcom’s Summary of Openreach’s June 2026 Offers

1. Incremental New to Openreach Offer.

This offer gives Internet Service Providers (ISPs) a monthly discount for bringing new full-fibre customers onto Openreach’s network. It applies only to new customers above an ISP’s normal number of new sign-ups. The discount could be very substantial – up to £9.50 per customer for up to 30 months.

2. Geographic Incremental New to Openreach Offer

In areas where Virgin Media operates, this offer provides a one-off £50 discount on new full-fibre customers to Openreach, above the usual number of an ISP’s new sign-ups. Altnets also have significant presence in some of the areas covered by this offer.

3. Frontbook ARPU Share Offer

When a household wants a higher-speed broadband package, they’ll typically pay more to their provider, who in turn will also pay more to Openreach. This offer will cap what an ISP pays on average for new high-speed connections at £19.32 per month. In practice it would make getting people onto higher speed packages more commercially attractive to ISPs.

In the end Ofcom’s new consultation has only provisionally proposed to block the first discount above (i.e. the Incremental New to Openreach Offer), and not the other two or a separate offer on business connections. The regulator’s view is that they consider the charges in that first offer “are not fair and reasonable and could harm the development of network competition“.

This marks the first time that Ofcom has stepped in to block a commercial offer from Openreach and will set a precedent for future discounts. Under this offer, Openreach was found to be “targeting significant discounts at new customers that are key to altnets’ ability to grow their customer base, while leaving prices for other customers unchanged“, which Ofcom feared could “undermine sustainable competition“. But the £50 discount in Virgin Media areas got a pass.

The reason the other offers were allowed is because they were found to be “much less substantial and would be unlikely to prevent other reasonably efficient networks from competing with Openreach“, explained the regulator.

Ofcom’s Provisional Proposals

We propose to direct Openreach to withdraw the Incremental New to Openreach Customer Offer. We are not proposing to intervene in relation to Openreach’s other notified offers. Our provisional assessment of the offers is as follows:

• Incremental New to Openreach Customer Offer:
Our provisional view is that Openreach’s charges under this offer are not fair and reasonable, because they result in margins that may not allow a reasonably efficient operator to recover its costs. We consider that, because of its SMP, Openreach is uniquely able to make such a targeted low-price offer. The discounts are targeted at customers which are important to altnets’ ability to maintain and grow their customer base, while leaving prices for other customers unchanged. Matching these significant targeted discounts may not allow competing networks to recover their costs, particularly given the low prices they are already offering across their customers, as they seek to grow take-up and overcome Openreach’s incumbency advantages. As such, there is a risk that the level of the offer prices could harm the development of network competition, to the detriment of consumers in the long term. We are therefore proposing to direct Openreach to withdraw this offer.

• Geographic Incremental New to Openreach Customer Offer:
This offer also targets lower prices at customers which are important to altnets’ ability to maintain and grow their take-up but applies in VMO2 areas. It is geographically targeted at areas where altnets also have significant presence, but are not yet established and sustainable competitors. Notwithstanding these features, the scale of the discount in this case means that we consider that the geographical targeting of this offer does not amount to undue discrimination as, in our view, the risk that the discount would harm long-term competition is not sufficiently plausible. Therefore, given the specifics of this offer, we are provisionally content for Openreach to implement the offer on this occasion. We also consider that the conditionality in the offer does not potentially create a barrier to using a rival network.

• Ethernet Net Demand Offer:
We consider the conditionality attached to this offer does not potentially create a barrier to using a rival network, and the price level does not raise prima facie concerns that would lead us to investigate in further detail.

• Frontbook ARPU share offer and Box Swap offer:
Taking account of CFI responses, we have also assessed these offers, which commenced on 1 July and are not conditional or geographic offers. In our provisional view, they do not raise concerns under the fair and reasonable FTTP pricing requirement.

• Six-month extension of existing Equinox incentives:
Having assessed this extension, we have determined that it does not raise concerns about the conditional terms within the offer and, as this an extension of the existing offer, the price level is already factored into our assessment of pricing described above.

We are mindful of the potential cumulative impact of multiple, overlapping offers and have taken this into account in our assessment of the offers.

Ofcom’s consultation on their provisional recommendations will run until 27th August 2026 and they expect to make a final decision by the end of September 2026. On the one hand we suspect Openreach will argue that this will deprive consumers of lower broadband pricing, while also making it harder for them to compete with often cheaper and faster alternative networks (altnets).

On the other hand, Ofcom’s view is that the Openreach discount they want to stop could harm “sustainable competition“, which over time might result in prices rising due to a lessening of competition through the presence of fewer rival networks. But admittedly there is an element of crystal ball gazing in all of this.

Rajiv Datta, CEO, nexfibre:

“We welcome Ofcom’s proposal to block the most egregious of BT Openreach’s proposed offers, but it does not go far enough.

The regulator should also consider the cumulative effect of the steady drip-feed of other offers, which form part of a wider playbook to prevent the emergence of scaled wholesale competition and entrench BT Openreach’s dominant position.

We will make these points in our response to the consultation.”

We hope to have Openreach’s reaction shortly.

UPDATE 8:16am

We’ve got Openreach’s response and a reply from Virgin Media (O2).

James Lowther, Managing Director for Commercial (Openreach), said:

“We’re disappointed that Ofcom has expressed concerns about one of our four offers, which we put forward in good faith at a time when many households are watching every bill. In such a competitive market, we don’t believe that regulation should protect poor business models and we disagree with Ofcom’s analysis. We’ll continue to engage constructively via the consultation to help our customers compete.”

A Virgin Media O2 spokesperson said:

“We agree with Ofcom’s decision to block one of Openreach’s most aggressive offers, but this still fails to recognise the full picture of the incumbent’s tactics, the interrelated nature of the offers and Openreach’s clear intent to ‘test the waters’ with the aim of continuing to disrupt emerging competition in future.

Ofcom should be tougher in holding Openreach’s behaviour to account as it looks to entrench its dominant position and squeeze competition against the direction set by the regulator in its recent market review. We’ll be making these points clear in our response to Ofcom’s consultation.”

UPDATE 11:21am

The Independent Networks Co-operative Association (INCA), which represents many altnets, has given a partial welcome to Ofcom’s proposal.

Paddy Paddison, CEO of INCA, said:

“INCA welcomes Ofcom’s provisional view on Openreach’s Incremental New to Openreach Offer. This is an important and timely intervention, and a clear signal that sustainable network competition must be protected at the point it is beginning to take hold.

INCA and its members made detailed submissions to Ofcom’s Call for Inputs on the offers notified by Openreach on 1 June. We are pleased that Ofcom has recognised the risk that a heavily discounted offer, targeted at the very customers independent networks need to grow, could undermine the development of fair and sustainable competition.

This is not the end of the process. It is an important first step. Ofcom has reached a provisional view on one offer, but INCA remains concerned that the wider package of Openreach offers needs to be considered carefully, including their combined effect on independent networks, non-BT Group ISPs and long-term consumer choice.

Competition is working. Independent networks now pass 19.7 million premises and added more than 850,000 customers during 2025. That investment is helping to create a genuinely competitive broadband market, bringing faster services, better customer experience and greater choice to homes and businesses across the UK.

The purpose of regulation in this market should be to support that transition from emerging competition to sustainable competition. Discounts that simply move customers from one fibre network to another do not extend coverage, connect the hardest-to-reach premises or help build the gigabit-capable Britain the country needs.

Openreach must be able to compete, but it must not be able to use its Significant Market Power in ways that weaken the very competition Ofcom has worked for many years to create. We now urge Ofcom to stand firm in its provisional view and to apply the same competition principles rigorously to the other offers notified by Openreach on 1 June.

INCA will work closely with its members over the coming weeks to provide further evidence to Ofcom. Today’s announcement shows that the evidence submitted by the independent broadband sector matters. The next phase is to ensure the final decision protects investment, competition and consumers for the long term.”