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12 Month FTTP Contract?

itsjamielike

Regular Member
Hello,

Looking at moving abroad over the next year or so, and noticed that BT... sorry Openreach have this week enabled FTTP at my address,

I don't know if I am missing anything but I can only find 2 providers at the moment who provide 12 month FTTP contracts, at 900mb speed - Cuckoo and BT. One being around £55 and one being £65.

Am I missing anyone?

Vodafone would be my first choice at £35 a month but it is a 24 month contract, and I can't find anyone (Like virgin media), who will let you cancel if you leave their area without a cost.

Thanks

Jamie
 
one stream does 12 months, 900mbps plan for £34 (they use vodafone)
 
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one stream does 12 months, 900mbps plan for £34 (they use vodafone)
Just seen this is that Vodafone over the openreach network looking to move away from Virgin in a few months due to drop outs when streaming
 
Aquiss do a 12 month contract, 1st year equivalent to £41.25/month, though you do have to supply your own router.
I suspect you may have more luck with smaller isps
 
The reason virtually no-one is doing FTTP on 12-month contracts is down to cost - put simply the ISP has to shoulder a chunk of up-front costs for your connection that it then has to recoup over the life of the contract.

The main one of these is the Openreach Standard Connection charge which applies to a premises getting FTTP for the first time. This is currently £114.78 ex VAT, rising to £120.05 ex VAT from 1st April. The second cost is generally the router they supply - as an example, ours cost us in the region of £40/unit ex VAT. So straight of the bat you've got ~£160 worth of costs for the connection before you've issued the first monthly bill. Break that down over the 12 months of the contract and you've got to make £13.33/month over and above the Openreach circuit rental just to break even on the upfront costs.

Now on a 900Mbps Openreach circuit, the Equinox pricing for that is around £22/month ex VAT which means that if you're selling your service for £35 inc VAT (£29.17 ex VAT) you are losing £6.16/month (£29.17 - £22 circuit rental - £13.33 upfront costs) on that contract.

Even on a 24-month contract, you would only be making £0.50/month or £12 over the life of the contract which has to contribute towards staffing costs, network equipment, bandwidth, etc.

As more premises have FTTP installed and people start switching contracts, it's going to become a lot more viable for ISPs to offer 12 month contracts again as if you are migrating a customer's FTTP circuit in from another ISP it only costs you £3.71 rather than the £120 Standard Charge.

Hope that gives you an insight into why there are so few 12 month contracts, and why the ones you can find are generally much higher in price.

RobC
 
But that doesn't explain why cost to the customer goes *up* at the end of the contract (almost double in the case of Plusnet). Nor does it explain why to get a sensible price on renewal with your existing ISP you have to sign up for another 24 month contract, when you already have an active line and a router.

IMO the real reason is because they don't want you to be able to jump to another ISP when a good deal comes along.
 
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But that doesn't explain why cost to the customer goes *up* at the end of the contract (almost double in the case of Plusnet). Nor does it explain why to get a sensible price on renewal with your existing ISP you have to sign up for another 24 month contract, when you already have an active line and a router.

IMO the real reason is because they don't want you to be able to jump to another ISP when a good deal comes along.
Totally agree on this one.

As more premises have FTTP installed and people start switching contracts, it's going to become a lot more viable for ISPs to offer 12 month contracts again as if you are migrating a customer's FTTP circuit in from another ISP it only costs you £3.71 rather than the £120 Standard Charge.
Indeed. Currently Openreach FTTP take up is 33% so that means 1/3 of ISPs installs already have FTTP. I expect that to continue to rise quickly as BT continues their FTTP build and push for copper decom.
 
The reason virtually no-one is doing FTTP on 12-month contracts is down to cost - put simply the ISP has to shoulder a chunk of up-front costs for your connection that it then has to recoup over the life of the contract.

The main one of these is the Openreach Standard Connection charge which applies to a premises getting FTTP for the first time. This is currently £114.78 ex VAT, rising to £120.05 ex VAT from 1st April. The second cost is generally the router they supply - as an example, ours cost us in the region of £40/unit ex VAT. So straight of the bat you've got ~£160 worth of costs for the connection before you've issued the first monthly bill. Break that down over the 12 months of the contract and you've got to make £13.33/month over and above the Openreach circuit rental just to break even on the upfront costs.

Now on a 900Mbps Openreach circuit, the Equinox pricing for that is around £22/month ex VAT which means that if you're selling your service for £35 inc VAT (£29.17 ex VAT) you are losing £6.16/month (£29.17 - £22 circuit rental - £13.33 upfront costs) on that contract.

Even on a 24-month contract, you would only be making £0.50/month or £12 over the life of the contract which has to contribute towards staffing costs, network equipment, bandwidth, etc.

As more premises have FTTP installed and people start switching contracts, it's going to become a lot more viable for ISPs to offer 12 month contracts again as if you are migrating a customer's FTTP circuit in from another ISP it only costs you £3.71 rather than the £120 Standard Charge.

Hope that gives you an insight into why there are so few 12 month contracts, and why the ones you can find are generally much higher in price.

RobC

It can still be offered with the install fee charge tagged on though, and its your choice to supply the router to the customer, I assume the ONT is supplied via Openreach as part of their installation.

I remember contacting ofcom about FTTP contract lengths and their reply was something to be ashamed off, it was initially claiming its widely available, then when I asked for proof of it after supplying them packages from various isps it changed to along the lines of tough luck.

Also what is the reason for 18 months on migration installs of which I assume is either no or minimal openreach connection fee? Or do openreach charge full fee in instances where no visit is needed? If its a much reduced install charge I would expect 1-6 month contracts to be easily viable, again dont supply a router.

Curious, do your prices stay the same when the contract ends and moves on to rolling monthly? If no whats your reason for increasing them.
 
I remember contacting ofcom about FTTP contract lengths and their reply was something to be ashamed off, it was initially claiming its widely available, then when I asked for proof of it after supplying them packages from various isps it changed to along the lines of tough luck.
Correct: the view is that the UK has a competitive market so if people don't like the offer from provider A then they can choose providers B, C, D or E.

This is true to a degree: if you don't like the 24 month contracts then you can vote with your feet and take a 12 month one from a smaller provider (as I do). But you will pay for the privilege. At the end of the day it's a question of what's more important to you, the lowest possible price or getting the type of service and contract that you want.

There is a race to the bottom between the big providers though. Once one of them starts offering lower headline prices because of in-contract increases (which are mostly hidden at purchase time), almost everyone else is forced to do it or lose customers. However, the market itself is degraded by not having clear pricing information for customers to make informed choices. This is where Ofcom *is* minded to intervene, and hopefully they will.
 
Correct: the view is that the UK has a competitive market so if people don't like the offer from provider A then they can choose providers B, C, D or E.

This is true to a degree: if you don't like the 24 month contracts then you can vote with your feet and take a 12 month one from a smaller provider (as I do). But you will pay for the privilege. At the end of the day it's a question of what's more important to you, the lowest possible price or getting the type of service and contract that you want.

There is a race to the bottom between the big providers though. Once one of them starts offering lower headline prices because of in-contract increases (which are mostly hidden at purchase time), almost everyone else is forced to do it or lose customers. However, the market itself is degraded by not having clear pricing information for customers to make informed choices. This is where Ofcom *is* minded to intervene, and hopefully they will.

At the time ofcom couldnt even give me one ISP offering 12 months or less on FTTP, I did eventually find one isp offering the contract length on FTTP, which just about makes the competition stand (albeit on one leg, ISP was BT, very likely an agreement with ofcom to avoid regulation as BT is a major ISP which would allow ofcom to state the competition handles it, I think ofcom also treat access to gigabit cable as equal to access to FTTP and VM offer even 1 month contracts). The basis of my argument to ofcom was accessibility of FTTP to those who arent in a position to sign up to long term contracts such as people in AST's.

The conclusion I drawn from it was a combination of what you said (competition takes care of it) and that ofcom dont see the contract length issue as market failure, the same way they dont consider inflation busting price rises during contract as market failure.

I think the bigger issue is what happens at contract end which you pointed out in an earlier post. Essentially then someone in an AST then cant just gamble the initial period they have to on every renewal or face a large price hike for no logical reason. (VM I think waive liability if moving to an area they dont cover with same product, not sure about FTTP, DSL ISPs).
 
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You can find ISPs with 12 month contracts on this site. Click the "ISP List" tab at the top of this page, select "Ultrafast", then sort by contract length. Relatively well-known providers on Openreach FTTP include Pulse8, iDNET, and Aquiss. I was unaware that BT offered 12 month contracts.
 
You can find ISPs with 12 month contracts on this site. Click the "ISP List" tab at the top of this page, select "Ultrafast", then sort by contract length. Relatively well-known providers on Openreach FTTP include Pulse8, iDNET, and Aquiss. I was unaware that BT offered 12 month contracts.
I dont know if BT still do, and I was only interested in finding major ISPs at the time.

Its hard to check these things directly because if you dont have a postcode FTTP is available the packages are usually not made visible.
 
@candlerb Best I can figure out, the price goes up to force you into taking a fresh 24 month contract and therefore locking you in for another two years.

@WKDRED We can offer a lower contract term with the install fee tacked on, but our experience so far is that (certainly in our area) there is no real demand for it. I am looking at revisiting our prices, etc in the very near future so I may well advertise this option when we do.

As for 18 months on migrations, with our current ordering platform we can't determine during the customer-ordering process whether they are migrating or a new install so it's more straightforward to simply offer the same contract term for both. Alongside revisiting pricing, I am looking at options to improve the order platform so that it can pull the live data from Openreach's database via API which would also tell us if the customer is migrating.

In terms of the end of the contract, our pricing remains the same and the customer simply moves onto a rolling 30-day contract.

@meritez We don't use BT Wholesale, we buy direct from Openreach and that cost is the actual Openreach FTTP Standard Install charge.
 
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Appreciate the openness @RobWiFiScotland and good you are considering options. Also good on the rolling contract policy, so at least your stuff seems thought through in terms of fairness to both sides.

Demand can be hard to measure, I know in my case I have never bothered to ask an ISP if they will do short term contract if they dont offer it, as I know they not going to offer me one so whats the point? So instead I just take the plunge and order the longer contract or look for an alternative, either way the ISP would have no idea I was interested in a short term contract.
 
Appreciate the openness @RobWiFiScotland and good you are considering options. Also good on the rolling contract policy, so at least your stuff seems thought through in terms of fairness to both sides.

Demand can be hard to measure, I know in my case I have never bothered to ask an ISP if they will do short term contract if they dont offer it, as I know they not going to offer me one so whats the point? So instead I just take the plunge and order the longer contract or look for an alternative, either way the ISP would have no idea I was interested in a short term contract.
No problem - while I want to make a nice profit in our company, I don't want to just greedily fleece the customers to achieve it.

I definitely see your point regarding measuring demand. What you've written there makes me think that when I improve our ordering platform providing a dropdown or radio buttons for each package to choose the contract length may be a good way about it. That would allow us to offer our standard 18 months, alongside 12 and potentially 1 month options.
 
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