First official indications of Fibre on Demand pricing from Openreach
Wednesday 05 December 2012 09:05:15 by Andrew Ferguson

A briefing from Openreach that applies equally to all broadband providers has been issued bringing good news that the 330 Mbps downstream and 30 Mbps upstream product is to decrease in price from around £60 per month to £38 per month in June 2013. This is of course at the wholesale level and only covers the cost of the end-user link and data getting as far as the local handover (exchange), but if TalkTalk were to keep the same sort of markups as their FTTC products a retail 330 Mbps product might be £77 per month including voice line rental.

The bigger news for many is the some of the first official indications of the installation cost for Fibre on Demand, a property that is 500m away from a NGA Aggregation Node will incur a charge of £1000 plus another £500 for installation of the service into the property. The £1000 charge will be smaller if closer to the NGA Aggregation node and higher if further away, no indications of the range of variation is available. These figures replace previous estimates we made of £500 - £1500 which we were told were in the ball park almost a year ago.

The pricing is such that it only pays a fraction of the costs of any one property connecting, so for the first property connecting in a cluster of a dozen properties, Openreach will be spending well in excess of these sums of money, with subsequent demand eventually paying off the balance of this initial construction cost. The result of this, is that even if you are the second or third property on a fibre manifold, you will still be paying the same sort of price. We will enquire as to whether there are possible bulk discounts if a cluster of properties sign-up at the same time.

FTTP on Demand is available in some areas already but only as part of the pre-launch trials, from January 2013 areas of Basingstoke, Watford, Cardiff Central and Manchester Central exchange areas that have FTTC will be able to participate in the second phase of trials. During the trials fibre on demand is only available using the 330 Mbps speed variant but at launch the full range of FTTP speeds which include 40 Mbps, 80 Mbps, 110 Mbps, 220 Mbps and 330 Mbps should be available. This range of speeds means a provider like Sky should be able to offer an 80 Mbps FTTP product for the same monthly cost as their current FTTC products, and the same ISP hardware will work. Only if you want faster speeds over FTTP does the cost increase.

The price drop of the 330 Mbps product in June 2013 is welcome, but if you look at the price of the 330 Mbps / 20 Mbps product the price change looks less impressive, as for those where upstream speeds of 20 Mbps will be plenty, that variant is available for £24.61 per month.

While we are certain many people will be taking a deep breath when they find out the fibre on demand pricing, for those who struggle with an unstable ADSL/ADSL2+ service now the stability of fibre, its fixed speed connection and the potential for a home to be advertised for sale as fully fibre enabled makes it a more reasonable option for those who own their own home.

A measure of how important the fibre on demand product is to the future of a fully digital UK is shown by the fact the Financial Times was one of the first to cover this announcement. For each property that connects to fibre on demand, the UK will also qualify as being able to say another 8 to 12 properties are passed by fibre, and if fibre on demand proves popular we may in a couple of years see connection costs reducing.