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Openreach increases price of fibre on demand FTTP product
Tuesday 28 January 2014 12:21:31 by Andrew Ferguson

Fibre on Demand FTPP which is on offer from Openreach in a selection of locations around the UK which can already get a FTTC based is not a cheap service to install but with its previous wholesale price of £38+VAT it was just about in the realms of the home workers and others who are happy to pay a premium for a premium service. Unfortunately it would appear that after some number crunching on the actual cost of installations done to date Openreach is putting the price up from the 1st May 2014.

  • The three year contract currently carries a £38+VAT monthly fee, this will increase to £99+VAT.
  • The fixed connection charge will increase from £500 to £750.
  • The variable one-off distance based charge will increase to £3.50 per metre from the current £2 per metre. This is the radial distance to the aggregation node that your FTTC cabinet is connected to, so generally near the fibre cabinet.

This means whereas previously around half of UK premises could be expected to pay in the region of £700 to £1500 for the initial connection, this rises to a range of £1,100 to £2,500.

Whether this will kill the demand for Fibre on Demand is down to how much the SME community value a 330 Mbps download speed (30 Mbps upload) with the reliability of a full fibre connection. We should point out as ever, that in areas where native FTTP is installed by Openreach (i.e. no FTTC and only FTTP as the super fast option), the pricing remains the same and this native service does not have the large install fee.

The cynically will look at the Super Connected City voucher scheme which allows for a voucher of up to £3,000 to cover the initial cost and suggest that the price rises are a move to ensure Openreach gets a bigger slice of the pie, but the cities voucher scheme does have some strong competition from fixed wireless and other FTTP/B providers so it seems a dangerous gamble if that is what Openreach is doing.

Installing FTTP for a single user is an expensive game, particularly since with GPON, this means deploying a splitter and other passive hardware, so we hope that maybe Openreach can come up with a discount scheme where if 2 or 3 properties or businesses that would be served by the same fibre manifold were to apply through the same provider that a discount on the individual costs would be possible. We need to point out that the costs of the hardware and civil works are nowhere near fully borne by the first person to order on a specific drop point, each manifold supports 8 to 12 customers so likely that the costs reflect perhaps one seventh of the costs (an estimate).

We are informed that demand for FTTP on Demand to date has been low with an extremely low volume of orders. These price rises are not going to help at all, unless you are a venture capitalist looking at investing in a FTTP operator to bring some ultrafast competition to parts of the UK.


Posted by adslmax over 3 years ago
Wait until BT will increasing monthly price for FTTC next soon. Not surprise really.

I cannot see no ones willing to sign up FTTPoD for home users.
Posted by Dixinormous over 3 years ago
This puts the cheapest FTTPoD I'm aware of up to a monthly fee of at least 180GBP/month when this filters through.

With the ongoing ban on FTTPoD to MDUs and multiple occupant office buildings this pretty much ensures the product will retain its low uptake.

For that price the upload speed has gone from low to utterly derisible.

I would blame the voucher scheme to a large degree but also a desire to deter uptake and reduce ongoing losses.

Having already heavily pared down the native FTTP deployment I hope they have a better FTTC product set in mind.
Posted by lockyatlrg over 3 years ago
I'm out... :D
Posted by AndrueC over 3 years ago
So - leased line business not going so well lately?
Posted by dogbark over 3 years ago
I can see why demand has been low. There's nobody selling it.
Posted by Dixinormous over 3 years ago
There are people selling it, but not surprisingly it's not something you'll see advertised by Sky Broadband, Talk Talk, or even the 'mass market' business services. Even more unsurprising given that it's barely available anywhere.

Take high up front costs, add to high ongoing costs, throw in some 3 year contract and then a dash of very minimal coverage and it's not surprising it's not widely advertised.
Posted by ValueforMoney over 3 years ago
Current Copper Cost recovery - e-side capital £7.14 pa (20yrs), d-side capital pa £38.41(20yrs) and dropwire capital £17.14 (10yrs) is c£62 of the c£85 in the MPF costs - table 6.8 in the current Ofcom FLA reviews.

Are we expected to pay twice? When do we start linking a right to recover cost with an obligation replace over a 15 year period.
Posted by AndrueC over 3 years ago
"When do we start linking.."

..when the asset being discussed is owned by you or the general public.
Posted by chrisdev over 3 years ago
In areas where people have a choice between 80Mbps and 330Mbps of course take up is going to be low. However, give me the choice between my current 5.5Mbps and 330Mbps and I WILL pay...but I'm stuck on 20CN still.
Posted by uniquename over 3 years ago
If you could get the 330Mbps service the article is about then you could get the 80Mbps one at normal prices.
Posted by WWWombat over 3 years ago
Ouch. Some bean counter at Openreach must have lost the battery from his calculator. This one smacks of serious miscalculation in the first place.

Someone has to ask why... And presumably BT's quarterly results are coming up. A good chance to query the finance guys about this one.
Posted by Ixel over 3 years ago
Depends, if you're quite a distance from the cabinet and get poor line reliability and/or speed then some may have the budget and the desire to get FTTPoD.

Personally I wouldn't touch FTTPoD even if it were available in my area, the upload speed is way too low for that price imo.
Posted by hoggig over 3 years ago
Disappointing. I'm a regular home worker and was looking forward to this. I could have justified the install cost and monthly but the revised monthly doesn't make sense now.
Posted by Plankton1066 over 3 years ago
I love the concept that you pay the full cost of the install plus profit and then have to pay a monthly free to "rent" what you've bought.
Posted by adslmax over 3 years ago
BT are there to HAUNT you all, destroying your dream!
Posted by Hedjam over 3 years ago
To increase FTTPoD take-up:

- a single capital sum instead of a high priced three year contract

- allow individual individuals to go straight to Openreach and bypass CPs/ISPs

- allow neighbours to club together for reduced joint costs

- once infrastructure is in place, allow same choice as potential native FTTP customers (modest installation fee plus range of speeds/prices)

- allow those with EO lines with duct access to the cabinet/aggregation node to get FFTPoD

- increase the number of exchanges

Posted by ValueforMoney over 3 years ago
@Andrew C - the asset and its owner is subject to regulation, so we change the regulation and send the desired economic signal.
Posted by coolbru2k over 3 years ago
Strangled at birth.
BT=Bloody Terrible.

Time to break up this monopolistic vulture.
Posted by dogbark over 3 years ago
Is it too much to ask for a list of isps selling FTTPOD ?
Posted by ValueforMoney over 3 years ago
@andrew BDUK paying for fibre deep into d and e side. BT Dropwire suppliers (10 year lifespan) can provide copper/fibre for a small bit on the £17pa - so a little adjusting and a programe can at least be started. BU LRIC will not support £99.
Posted by WWWombat over 3 years ago
But if you keep changing regulation, you send a very different economic signal - that investors should stay away. You make the market unreliable & risky, beyond the normal risk of the market.

BTW - I think you lose many readers when you drop into economics terms such as recovery & lric. To most people, "bu lric will not support £99" is meaningless jargon, not a plain-English explanation.

Question: can LRIC be applied to a fledgling rollout? Is LR really known?
Posted by csimon over 3 years ago
1. Extremely expensive.
2. Not publicised well and hard to find a seller.
3. Only available to those who've already got FTTC, i.e. those with already fast or superfast speeds who might now need a dozen HD TV streams at the same time or those looking forward to 4K maybe, or similar more specialist requirements.

Not surprised it's not that popular.
Posted by vicdupreez over 3 years ago
@ Hedjam. Everything you say is spot on, but I think you are missing the point. BT does not want to drive up demand. They will to kill this just like they killed the dream of naked DSL. There they claimed that there was not a big enough demand. Like I said before, I want nothing (that I know of) to do with them.
Posted by ValueforMoney over 3 years ago
@wwwombat thanks for the guidance - Bottom UP Lrong run incremental cost (BU LRIC) as per EU guidelines - but not yet used by ofcom.

LRIC - yes it can I believe.
Posted by New_Londoner over 3 years ago
Your pricing suggests seem fair, of course there is nothing stopping any ISP adopting all/any of them. All we have at the moment are the prices and price structure from Openreach, it would be great to see how ISPs that we can all buy from decide to price this too.
Posted by New_Londoner over 3 years ago
Putting the acronyms in full is not the same as putting your point in plain English. Not that I'm bothered - as you know I think your basing your comments on far too many of your own assumptions and extrapolations, and that it would save a lot of pointless posts to let BDUK do its calculations about value for money based on real, invoiced costs rather than guess work.

Still, it's a free country and mainly your time that is being, in my view, wasted, so carry on as you see fit.
Posted by New_Londoner over 3 years ago

A few less duplicated posts would be appreciated, especially when shoe-horned in as off-topic comments to far to many stories.
Posted by ValueforMoney over 3 years ago
New_Londoner noted but need answers, and posts are in between large data queries. Factually, logically VFM (costs) not possible until project complete and benchmarked. This is second best.
Thank you for coming online. Even non answers help in identifying next steps.
Posted by WWWombat over 3 years ago
As far as I can work out, "long run incremental costs" works out the cost per service, based on a good knowledge of the long-term costs involved, including an allowance for all future replacements at appropriate intervals.

A price hike like this one means that Openreach don't understand the costs well enough... and if they don't understand the current ones, how can they predict the long run? That makes LRIC of fibre unreliable to me.
Posted by Hedjam over 3 years ago
@New Londoner

No ISP will be interested in becoming responsible for infrastructure deployment, or having a three year contract with Openreach but a shorter contract with their few FTTPoD customers (especially if following Ofcom rules). And they can do nothing about Openreach's refusal to do anything about EO lines - ask BT Retail about any kind of improved service on EO lines even for large investments, and they will say "nothing we can do, it's up to Openreach".
Posted by fastman over 3 years ago
hedman theire is already the ability to engage with openreach around prviate fundung of "infrascructure" for a community (see FAQ's) and an increasing number of communities are investigating that and in somes cases where it is appropriate using that route to enable their community to be upgraded
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