Fact check on claim BT Broadband prices to rise by £80 a year
A price rise of over £80 a year or £7 per month is claimed by the Daily Express for BT Broadband but once you finally stop waiting for all the adverts and media to render on the page and scroll past a video clip of Martin Lewis talking about BT broadband price rises you get to the reality.
The first is that yes BT prices are set to rise in January and thus the clip from Good Morning Britain with Martin Lewis is correct as he is talking about the rises that people are being given the required 30 days notice of, but this price rise is not £7 per month and is also not what the Daily Express article is about.
The second point is that the £7 a month actually arises from a speech Ofcom CEO Sharon White gave at a visit to Virgin Media in Birmingham.
The challenge for BT
To catch up, we need still bolder commitments.
And the biggest player remains BT. We welcome Openreach’s commitment to reach two million homes with full fibre by 2020.
The company has also outlined plans to reach 10 million by the mid-2020s, but dependent on up to £7 a month being added to broadband bills.
We expect BT to go further, and make a reality of the ambition it has set itself to be - and I quote – “a national champion with the scale and expertise to meet Britain's future communications needs”.
We recognise, of course, the competing priorities that any major operator faces – be it investing in sports or other content rights, dividends, pensions or its broadband infrastructure.
But the national priority is clear.
Competition for fibre is growing, as will consumer demand for it.Sharon White, Chief Executive at Ofcom, at a visit to Virgin Media’s centre of excellence in Birmingham
We don't know the mathematics behind how the £7 was derived from what seems to be very early plan by Openreach, but what we will say is that if we as a nation want better services that require investment then someone somewhere will pay. In the case of large companies like Virgin Media and BT a reduction in share dividends can make more cash available for investment, but the large institutional investors will eventually want to see an improved dividend again and maybe a larger dividend to make up for the lean years. Or put another way the £3 billion investment from Virgin Media is eventually going to be paid for by the customers and similarly with firms currently burning their way through venture capital.
No doubt many of our readers would be happy paying an extra £7 per month on their broadband bill to flip from VDSL2 or ADSL2+ to full fibre, but the question is what about the bulk of the population and how this extra cost is portrayed - hence our calling out of a national paper over its coverage of this rise. In short it is no good getting the cost of delivering full fibre down to the £250 to £500 per premise passed if only 1 in 10 actually sign up, since you are then attempting to recover £2,500 to £5,000 from the person actually buying a service.
Ofcom has nailed its colours to the flag pole of competition, but we would add that if BT was to roll-out to 10 million homes there would be some very big battles about it, e.g. competition should allow BT to roll-out where it wants to and odds are that it will largely mirror the CityFibre Gigabit City footprint and the wholesale price is going to be very controlled and a final one will be complaints that all those ducts and chambers with space today will be filled up with Openreach fibre and the associated splitters. In short we look at BT as a national champion, but only at times when others are not interested in an area.
A challenge to Ofcom and all the full fibre operators, what the nation wants is not so much a choice of 2 or 3 ultrafast options at every property but for those homes and places of work where they struggle with the current broadband speed to have an option for a full fibre connection.