{"id":47527,"date":"2026-07-29T13:47:30","date_gmt":"2026-07-29T12:47:30","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=47527"},"modified":"2026-07-29T13:53:38","modified_gmt":"2026-07-29T12:53:38","slug":"point-topic-shows-why-ofcom-want-to-block-openreachs-uk-broadband-discount","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2026\/07\/point-topic-shows-why-ofcom-want-to-block-openreachs-uk-broadband-discount.html","title":{"rendered":"Point Topic Shows Why Ofcom Want to Block Openreach’s UK Broadband Discount"},"content":{"rendered":"

Telecoms analyst firm Point Topic<\/a> has published research that helps to explain why Ofcom<\/a> has proposed to block one of Openreach<\/a>’s new discounts on their full fibre (FTTP<\/a>) broadband products (here<\/a>). This might have otherwise given ISPs and new customers to their network a \u00a335 connection rebate and a \u00a39.50 monthly rental rebate (for 18, 24 or 30 months depending on performance).<\/p>\n

The discounts, which were first unveiled last month (here<\/a>), appear to be acting as somewhat of a test case to help uncover the limits of the telecoms regulator’s flexibility on Openreach<\/a>’s ability to discount their Fibre-to-the-Premises<\/strong> (FTTP<\/a>) lines at wholesale for UK ISPs. But sadly Ofcom<\/a>’s official consultation redacted a lot of the key figures, which would have allowed us to judge the competitive impact of this.<\/p>\n

Instead, we have to take Ofcom<\/a>’s word that the offers are “not fair and reasonable, because they result in margins that may not allow a reasonably efficient operator to recover its costs<\/em>“. The regulator added that Openreach<\/a>’s Significant Market Power<\/strong> (SMP) means that it is “uniquely able to make such a targeted low-price offer<\/em>” and had targeted it at customers which are important to altnets\u2019 (rival networks) ability to maintain and grow their customer base, while leaving prices for other customers unchanged.<\/p>\n

“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\u2019s 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<\/em>,” explained Ofcom.<\/p>\n

On the flip side Openreach’s James Lowther, Managing Director for Commercial, countered that in a competitive market like the UK they “don\u2019t believe that regulation should protect poor business models<\/em>” (a snipe at the many financially struggling altnets) and “disagree with Ofcom\u2019s analysis<\/em>“.<\/p>\n

In order to examine this Point Topic<\/a> used its own database of UK coverage and networks to try and fill in the redacted blanks of information. One of its examples uses postcode sector LS27 0 (Morley, on the south-western edge of Leeds), where altnet rival CityFibre<\/a> has built to 191 postcodes and Openreach’s FTTP<\/a> is already present in 184 of those. CityFibre<\/a> also has seven postcodes in Morley where Openreach is not present – 96% of what it has built is thus contested by the incumbent.<\/p>\n

PointTopic’s Statement<\/strong><\/p>\n

The test asks whether Openreach leaves enough margin for an efficient rival to cover its own costs. Ofcom estimates those costs using its 2026 Fibre Cost Model; adjusted for the offer’s \u00a335 connection rebate, they run from \u00a314.45 to \u00a322.23 a month, with a midpoint of \u00a318.34.<\/p>\n

Openreach’s discounted price falls below that midpoint in all three rebate tiers. In the deepest tier, where an ISP beats its baseline by more than 10%, and the rebate runs for 30 months rather than 18, the price falls below the bottom of the range altogether.<\/p>\n

The mechanism that makes this bite is the baseline. Each ISP’s target is set from its April 2026 New to Openreach volumes. But where an ISP has a wholesale agreement with an Altnet, it already routes almost all new connections to that Altnet where it is available. So the baseline largely captures volumes from areas where Openreach was the only option.<\/p>\n

The consequence, which Ofcom sets out at paragraphs 4.53 to 4.59, is that in overlap areas nearly every connection an ISP diverts back to Openreach counts as above-baseline, and therefore qualifies for the discount. The offer is national in form. In practice its economic weight falls on exactly the postcodes where Altnets have built.<\/p>\n

Which is where the 96% comes in. If almost all of CityFibre<\/a>’s Morley footprint is contested, then the discounted price is the price CityFibre has to compete against across nearly the whole of what it must win and not at some notional margin.<\/p><\/blockquote>\n

Point Topic<\/a> then highlights how the consultation’s reasoning, at paragraph 4.69, turns on Openreach’s unique position of having longstanding wholesale relationships, and a “footprint that mostly does not overlap with alternative networks, allowing it to hold prices up elsewhere while discounting where competition exists … Altnets, facing competition across most of their coverage and locked into long wholesale contracts with capped price increases, cannot replicate that structure<\/em>“.<\/p>\n

The full analysis<\/strong><\/a> goes into a lot more detail and is well worth a read. The study shows that it might be quite difficult for Openreach to get Ofcom to overturn their provisional position. If anything, there might be more scope to expand the block to at least one of Openreach’s other offers (e.g. the Virgin Media<\/a> targeted \u00a350 connection discount), but that will depend upon how receptive the regulator is to the arguments of rival networks.<\/p>\n

A final decision is due by the end of September 2026 and its conclusions will set an important precedent.<\/p>\n","protected":false},"excerpt":{"rendered":"

Telecoms analyst firm Point Topic has published research that helps to explain why Ofcom has proposed to block one of Openreach’s new discounts on their full fibre (FTTP) broadband products (here). This might have otherwise given ISPs and new customers to their network a \u00a335 connection rebate and a \u00a39.50 monthly rental rebate (for 18, […]<\/p>\n","protected":false},"author":1,"featured_media":42759,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1],"tags":[418,56,36,69,39,34],"class_list":["post-47527","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uk_isp_news","tag-cityfibre","tag-fttp","tag-ofcom-regulation","tag-bt-openreach","tag-point-topic","tag-statistics"],"share_on_mastodon":{"url":"https:\/\/mastodon.social\/@ispreview\/117003344443953771","error":""},"yoast_head":"\nPoint Topic Shows Why Ofcom Want to Block Openreach's UK Broadband Discount - ISPreview UK<\/title>\n<meta name=\"description\" content=\"Telecoms analyst firm Point Topic has published research that helps to explain why Ofcom has proposed to block one of Openreach's new discounts on their\" \/>\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\/2026\/07\/point-topic-shows-why-ofcom-want-to-block-openreachs-uk-broadband-discount.html\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Point Topic Shows Why Ofcom Want to Block Openreach's UK Broadband Discount - 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