Openreach to Cut Wholesale Prices of Full Fibre Connections to Bring ISPs and Customers on Board

Openreach (BT) will slash wholesale prices on its around 1.5 million full fibre (FTTP) connections, in an effort to encourage ISPs to offer the ultrafast services and consumers to sign up.

Openreach is currently connecting 20,000 homes and businesses each week to full fibre broadband connections, with the aim of reaching 4 million premises by March 2021, and potentially 15 million by 2025.

However, the number of ISPs offering services on these connections is limited. Neither Sky Broadband or TalkTalk—along with BT and cable provider Virgin Media, the UK’s largest ISPs—are offering full fibre packages yet.

Currently BT is joined only by a handful of smaller providers in offering services on Openreach FTPP connections. Limited choice of provider is one of the obstacles in encouraging consumers to sign up to full-fibre, along with price.

According to Openreach, take-up of its full fibre services among connected households is around a third (29.9%).

However, earlier this week Openreach announced it would be cutting the rates it charges ISPs for use of its FTTP connections, in an effort to bring them on board. Rates will be cut mostly sharply for its 330 Mbps tier.

Later this year, Openreach will also launch 500 Mbps and 1 Gbps-capable variants of its FTTP services, which have thus far been speed-limited at 300 Mbps.

It hopes these changes will encourage ISPs to invest in their full fibre packages and will attract more home subscribers.

But of course, it will be up to the ISPs to decide whether to pass these savings onto consumers.

Katie Milligan, Managing Director for Customer, Commercial and Propositions, at Openreach said:

“These price changes are a win/win for Communications Providers, their customers and Openreach. We believe they will encourage the UK’s homes and businesses to experience the benefits of faster and more reliable broadband.

“We hope they’ll incentivise our wholesale customers to consider the longer-term benefits of upgrading more of their customers to ultrafast Fibre to the Premises technology, particularly their customers who are currently using superfast Fibre to the Cabinet services.”

Openreach, owner of most of the UK’s physical broadband infrastructure, is vying with a number of smaller infrastructure providers in the full fibre market. Alternative Network ISPs including Cityfibre, Gigaclear, and Hyperoptic have sped ahead to connect just under 1.3 million households as of May 2019.

These alternative network providers are forecast to reach 3.38 million premises by 2020 and 15.96 million by 2025. Smaller, upstart suppliers are often able to offer ultrafast broadband at lower prices than services using Openreach and are already offering speeds of up to 2 Gbps on these connections.