New Openreach Fibre on Demand pricing may make service more attractive
The Openreach FTTP on Demand (FoD) product is one that causes lots of confusion and the worst part of that is the wording on the BT Wholesale broadband checker which means we have some notes warning about confusing FoD with the native GEA-FTTP roll-out in our fibre broadband guide.
The news today is that FTTP on Demand service is being revamped with new speed tiers, shorter contracts and the distance based charge banding replaced by another charge. The drop from a 36 month to a 12 month contract means that selling to consumers does not need the Ofcom contract rules to be bent and will appeal much more to residential customers who manage to have enough cash available to pay the FTTP on demand build charge.
Currently the only speed version available is the 330/30 Mbps one, but there will be five variants from February onwards and there are (all with 12 month contracts and pricing excludes VAT):
- FTTP on Demand up to 160 Mbps down, up to 30 Mbps up. £21.14 per month and £92 connection
- FTTP on Demand up to 330 Mbps down, up to 30 Mbps up. £38 per month and £92 connection
- FTTP on Demand up to 330 Mbps down, up to 50 Mbps up. £38 per month and £92 connection
- FTTP on Demand up to 500 Mbps down, up to 165 Mbps up. £55 per month and £500 connection
- FTTP on Demand up to 1000 Mbps down, up to 220 Mbps up. £80 per month and £500 connection
Remember the monthly cost only covers getting you a connection to an exchange handover point, so the chosen broadband provider needs to backhaul you to their core network and give you an ongoing connection to the Internet plus all the other associated costs and make a profit. The higher connection fee on the two fastest services is we believe a reflection of the shift from GPON optics to XGPON which has a higher headroom of 10 Gbps.
The fixed connection fee is pretty much always going to be eclipsed by the FTTP on Demand build charge and no indication of that the expected price will be, but there will be allowances made for your build meaning more people can order native FTTP and options for groups of premises to order the FoD version and thus spread out the FTTP on Demand build charge.
The new pricing is going to obviously get a lot of interest but before you go pestering your provider remember that at present the only ones who seem to sell FoD in any volume are Cerberus, FluidOne and Spectrum Internet and under the pricing regime while the initial quote will be free and non-binding if you proceed to getting a firm quote and subsequently don't proceed the provider will be charged a survey and design fee of £245.14, thus discouraging Walter Mitty types from ordering just so they can boast about it.
The timing is no great surprise, voucher schemes are becoming more widely available both for superfast and ultrafast, plus the competition from Virgin Media and CityFibre has been increasing. For the prosumer with the current low interest rates using some savings to pay any 'on demand' charges might prove to be a good investment and could boost the value of the property, home workers may once more be able to encourage their firms to install the service particularly now the monthly cost is much lower and if decent broadband means you can work seamlessly from home the savings in terms of commuting everyday might make it worthwhile even if you company won't pay the cost of upgrading you.
Unfortunately for those that blazed the trail during the high cost period and may have comitted to an order recently nothing will change all existing contracts and charges will continue to apply for the three year contract.
For those wondering how BT was going to handle the broadband USO, watching the various quotes that people get for FTTP on Demand might be informative, one idea might be that the obligation once in full effect might pay the first £x,000 of any FTTP on Demand build charge and if clusters of 5 or 6 six premises can aggregate their USO 'voucher' it could prove to be instrumental in taking that final 1 to 2% of the UK from digital hell to digital heaven.
The notes from Openreach don't say explicitly but the additional premises allowance does suggest that other properties that would be served by the manifold deployed by the FTTP on Demand build would actually see native GEA-FTTP service availability and thus skip the on demand build charge. We will fire off an email to double check that as it has implications for neighbours and also counting the number of premises passed by FTTP.
Update 6:45pm We have a reply to our questions and the summary is:
- The FTTP on Demand charge is only paid once, and native GEA-FTTP options and pricing apply to those who benefit from someone getting FTTP on Demand installed in their specific area. The deductions reflect the scope for others being able to order once the initial FoD connection has been made.
- The FTTP on Demand build charge has been explained in some depth during industry presentations i.e. to the providers who might or will sell the service, but a couple of scenarios are building to one property at a cost of £3,000 but after deductions this worked out at £2,250. In another scenario five businesses clubbed together to share the £15,000 build charge, but as an additional 5 premises would also be able to order afterwards this dropped to £11,000.