Home » 

UK ISP News Archives

 » 
Sponsored

BT FTTP Fibre Optic Pricing Discourages Smaller Standalone Broadband ISPs

Posted: 14th Feb, 2012 By: MarkJ
pound signbt openreach logoSeveral smaller ISPs have told ISPreview.co.uk that they feel discouraged from adopting BTOpenreach's new generation of superfast fibre optic broadband ( FTTP ) services because the current Transition Pricing, which applies until such time as Fibre Voice Access (FVA) becomes available (this allows voice calls to be made over the fibre optic line), appears to put them at a competitive disadvantage .

According to Aquiss UK, ISP's will get a rebate discount (worth roughly £9 +vat a month) if BT's Fibre-to-the-Premises (FTTP) and Wholesale Line Rental (phone line) are taken from the same supplier (i.e. bundled). On the surface that sounds like a good deal, unless you happen to be an ISP that doesn't offer BT's WLR and thus have to charge significantly more.

Martin Pitt, MD of Aquiss, said:

"We have been arguing this point for quite a number of days now. A whole host of problems appear. We can see this causing a possible 2 tier pricing structure, favouring the main market players. Many ISPs, vISPs or Channel Partners will have no WLR product in their portfolio, but they will also have customers who have established, in some cases long-term WLR (phone) contracts, in place. This means an extra cost where solutions are split.

Personally I only see this helping BT Group companies where the natural percentage of the UK population will have a BT phone line so the rebate will favour their retail models. This also forces ISPs back to BT, reducing choice long term."

Pitt's comments have been echoed to us by other providers, some of which could be delaying the launch of their own FTTP services until Fibre Voice Access (FVA) becomes available or coverage improves. But ISPs appear to be split on the issue.

Entanet, which supplies a number of UK broadband providers, suggests that BT might not have much of a choice because otherwise, in the face of mounting competition, they'd risk losing their line rental business and future telephony revenue.

Darren Farnden, Entanet's Head of Marketing, explained:

"It's easy to see why a sceptic might suggest that BT is making combined line rental and FTTP orders cheaper/more economically sensible than just an FTTP order so that they can ensure they don't lose their voice customers before they're able to offer FVA (Fibre Voice Access, essentially calls over the fibre connection but which doesn't yet commercially exist and has faced numerous delays already).

By not making such an offer, they risk losing the line rental business and hence future telephony revenue. Making the data-only FTTP connection more expensive might be seen as a deterrent to prevent this. Technically, BT will be exercising equivalence across the board because arguably everyone has the opportunity to take broadband etc from companies other than BT, even if not every provider/reseller.

BT definitely gains an advantage because, as the incumbent, they have a massive base of PSTN customers that they can capitalise on. Resellers need to put themselves in a position where they can bundle the PSTN rental with a fibre rental and provide calls and broadband; OR they provide the fibre broadband and overlay VoIP as the telephone service. This means carefully choosing a voice and data communications provider that gives them these options."

Ultimately most agree that the situation should resolve itself once FVA surfaces over the next few months. On top of that FTTP is currently only available to a tiny proportion of the UK, which won't change until spring 2013 when FTTP on Demand surfaces. As a result any negative impact from BT's transitional FTTP pricing shouldn't last for too long. We are currently awaiting a reply from BT.

A potentially more significant problem is the price of FVA itself (details), which is set to cost £183.48 +vat per year (£15.29 a month) and that's before any call deals or profit margins have even been added. It's little wonder that so many consumers are going mobile-only for voice calls.
 Latest UK ISP News
 Cheapest Superfast Broadband ISPs
  • Hyperoptic £15.00 (*25.00)
    Speed 50Mbps, Unlimited
    Gift: None
  • Vodafone £19.50 (*22.50)
    Speed 35Mbps, Unlimited
    Gift: None
  • NOW £20.00 (*32.00)
    Speed 36Mbps, Unlimited
    Gift: None
  • Shell Energy £21.99 (*30.99)
    Speed 35Mbps, Unlimited
    Gift: None
  • Plusnet £22.99 (*38.20)
    Speed 36Mbps, Unlimited
    Gift: £65 Reward Card
Large Availability | Compare More ISPs
 Cheapest Ultrafast Broadband ISPs
  • Hyperoptic £20.00 (*35.00)
    Speed: 150Mbps, Unlimited
    Gift: None
  • Vodafone £24.00 (*27.00)
    Speed: 100Mbps, Unlimited
    Gift: None
  • Community Fibre £25.00 (*29.50)
    Speed: 300Mbps, Unlimited
    Gift: None
  • Gigaclear £26.00 (*54.00)
    Speed: 400Mbps, Unlimited
    Gift: None
  • Virgin Media £27.00 (*51.00)
    Speed: 108Mbps, Unlimited
    Gift: None
Large Availability | Compare More ISPs
Promotion
Cheapest Superfast ISPs
  • Hyperoptic £15.00 (*25.00)
    Speed 50Mbps, Unlimited
    Gift: None
  • Vodafone £19.50 (*22.50)
    Speed 35Mbps, Unlimited
    Gift: None
  • NOW £20.00 (*32.00)
    Speed 36Mbps, Unlimited
    Gift: None
  • Shell Energy £21.99 (*30.99)
    Speed 35Mbps, Unlimited
    Gift: None
  • Plusnet £22.99 (*38.20)
    Speed 36Mbps, Unlimited
    Gift: £65 Reward Card
Large Availability | View All
Cheapest Ultrafast ISPs
  • Hyperoptic £20.00 (*35.00)
    Speed: 150Mbps, Unlimited
    Gift: None
  • Vodafone £24.00 (*27.00)
    Speed: 100Mbps, Unlimited
    Gift: None
  • Community Fibre £25.00 (*29.50)
    Speed: 300Mbps, Unlimited
    Gift: None
  • Gigaclear £26.00 (*54.00)
    Speed: 400Mbps, Unlimited
    Gift: None
  • Virgin Media £27.00 (*51.00)
    Speed: 108Mbps, Unlimited
    Gift: None
Large Availability | View All
Helpful ISP Guides and Tips
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
Promotion
The Top 20 Category Tags
  1. FTTP (3497)
  2. BT (3008)
  3. Politics (1923)
  4. Building Digital UK (1917)
  5. FTTC (1882)
  6. Openreach (1820)
  7. Business (1674)
  8. Mobile Broadband (1468)
  9. Statistics (1405)
  10. FTTH (1364)
  11. 4G (1270)
  12. Fibre Optic (1164)
  13. Virgin Media (1159)
  14. Wireless Internet (1151)
  15. Ofcom Regulation (1139)
  16. Vodafone (836)
  17. EE (829)
  18. TalkTalk (760)
  19. 5G (760)
  20. Sky Broadband (744)
Sponsored

Copyright © 1999 to Present - ISPreview.co.uk - All Rights Reserved - Terms  ,  Privacy and Cookie Policy  ,  Links  ,  Website Rules