{"id":33677,"date":"2023-02-13T00:01:49","date_gmt":"2023-02-13T00:01:49","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=33677"},"modified":"2023-02-11T08:21:03","modified_gmt":"2023-02-11T08:21:03","slug":"openreach-unlikely-to-launch-social-broadband-tariff-for-uk-isps","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2023\/02\/openreach-unlikely-to-launch-social-broadband-tariff-for-uk-isps.html","title":{"rendered":"Openreach Unlikely to Launch Social Broadband Tariff for UK ISPs"},"content":{"rendered":"

A growing number of ISPs have introduced cheaper Social Tariffs over the past year – aimed at those on benefits who are most exposed to the UK’s cost-of-living crisis. As part of this, some providers have called on Openreach<\/a> to launch social tariff products at wholesale to support them, but there’s so far no indication of that happening.<\/p>\n

True Social Tariffs<\/strong> are only available to those in receipt of certain state benefits (e.g. Universal Credit), which can vary between ISPs. Prices for these tend to start at around \u00a315 a month (inc. installation and a router) and they typically offer speeds of 15-50Mbps or better. Broadly speaking, these are basic broadband (or mobile) packages that are offered at around cost price or even below cost, which means no profit margin for the provider.<\/p>\n

NOTE:<\/strong> See our – Guide to UK Social Tariffs – Getting Broadband or Mobile for \u00a315<\/strong><\/a>.<\/div>\n

At present the low take-up of such tariffs means that they aren’t a huge drag on an ISPs bottom line, although that could change as adoption rises. Even BT<\/a> – an operator that attracts the lion’s share of social tariff users – has warned that they may eventually become “unsustainable<\/em>” without more support (here<\/a>).<\/p>\n

Last year Ofcom<\/a> estimated that, out of 4.2 million households in receipt of Universal Credit<\/strong>, some 136,000 had taken a social tariff<\/a> (3% of those eligible), which is up from 55,000 six months earlier. Suffice to say, the regulator’s next update may well double that figure again.<\/p>\n

Naturally, one possible way to both support such tariffs and encourage more ISPs to launch related products – a key demand of both Ofcom<\/a> and the government – would be for network access providers, particularly Openreach<\/a>, to launch Social Tariff products at wholesale. This might both help to make such tariffs cheaper and also help to share some of the burden that ISPs face in offering them.<\/p>\n

A number of broadband ISPs have recently told us that they’ve been calling on Openreach<\/a>, both formally and informally, to do exactly this. Similarly, Sky Broadband<\/a> last week informed us that they had committed to pass on any wholesale savings from Openreach, should they introduce a social tariff wholesale price.<\/p>\n

However, the current likelihood of this actually happening remains low and, after speaking with several ISPs, we understand that their calls have thus far been rebuffed. Openreach has similarly indicated to ISPreview.co.uk that their position is unlikely to change. So for now at least, short of a major intervention, it seems as if providers should not be expecting a big change in approach.<\/p>\n

A spokesperson for Openreach told ISPreview.co.uk:<\/strong><\/p>\n

“Openreach is heavily regulated and our prices came down for more than a decade as demand for broadband and data exploded.<\/p>\n

This year Ofcom<\/a> allowed us to link some prices to inflation for the first time, giving us \u201cheadroom to invest \u201c in faster, more reliable Full Fibre for the UK. That\u2019s something the whole industry agreed needs to happen and we\u2019re doing just that with more than \u00a315billion investment in new digital infrastructure.<\/p>\n

In April 2022, we increased prices for the first time by less than CPI (<4%) and we\u2019ll do so again in April (7.7%). This includes significant discounts on our Full Fibre products, which ISPs want, to encourage people onto our fastest, most reliable services.<\/p>\n

As a wholesaler, we\u2019re just one part of the value chain, but we do understand that our prices impact consumers, so we\u2019ve listened to and consulted our wholesale customers at length on our pricing plans. Inflation in energy, equipment and labour costs are affecting us too, but we want to continue investing to make sure the whole of the UK benefits from Full Fibre broadband.”<\/p><\/blockquote>\n

The operator also highlighted that they have introduced some help via their earlier Connect the Unconnected<\/strong><\/a> offering, which essentially waived the connection fees for new low-income customer households on Universal Credit – saving them up to \u00a392. But this is due to end on 31st March 2023 (unless extended again) and the lack of a long-term approach doesn’t help the future sustainability challenge. Not to mention its other restrictions (i.e. it’s only available to new connections, those taking UC and on FTTC<\/a> lines).<\/p>\n

For its part, the Government could conceivably also help by offering to part-subsidise such tariffs from public funding. But, given the state of the economy right now, they seem much more likely to continue passing the buck by putting pressure on the private sector to sort out all the country’s many socioeconomic problems for them.<\/p>\n

Finally, a quick reminder – we know social tariffs can be a divisive topic for some, but that is not an excuse to abuse the comment system in order to post offensive remarks toward those who take state benefits. Such posts are against our rules and will be removed.<\/p>\n","protected":false},"excerpt":{"rendered":"

A growing number of ISPs have introduced cheaper Social Tariffs over the past year – aimed at those on benefits who are most exposed to the UK’s cost-of-living crisis. As part of this, some providers have called on Openreach to launch social tariff products at wholesale to support them, but there’s so far no indication […]<\/p>\n","protected":false},"author":1,"featured_media":23344,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1],"tags":[36,69,2638],"class_list":["post-33677","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uk_isp_news","tag-ofcom-regulation","tag-bt-openreach","tag-social-tariff"],"share_on_mastodon":{"url":"","error":""},"yoast_head":"\nOpenreach Unlikely to Launch Social Broadband Tariff for UK ISPs - ISPreview UK<\/title>\n<meta name=\"description\" content=\"A growing number of ISPs have introduced cheaper Social Tariffs over the past year - aimed at those on benefits who are most exposed to the UK's\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ispreview.co.uk\/index.php\/2023\/02\/openreach-unlikely-to-launch-social-broadband-tariff-for-uk-isps.html\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Openreach Unlikely to Launch Social Broadband Tariff for UK ISPs - 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