40/10 FTTC charge controls tweaked by Ofcom in final version
The final rubber stamp has been applied to a set of rules imposed by Ofcom that are intended to encourage more full fibre deployment in the UK and even ahead of the rules taking effect its worth adding that full fibre coverage is marching on from the 3% in the Ofcom consultation to 3.6% in our figures and there is more to be added.
So while there is the duct and pole sharing that BT Openreach must allow other operators to do, there is also a new charge control on the core FTTC product i.e. the 40/10 product which is currently advertised to the public as a 38 Mbps down and 9.5 Mbps upload service.
We covered the charge control that sets an anchor price back in February but there has been a small tweak subsequently to take into account new data on inflation and the costs arising from the BT pension scheme. So an updated set of figures follows.
|Prices exclude VAT||Current Annual Charge||2018/19||2019/20||2020/21|
|40/10 Mbps rental||£7.40/m||£5.80/m||£5.09/m||£4.99/m|
|Copper access aka line rental||£7.03/m||£7.12/m||£7.08/m||£7.07/m|
The changes mean 2018/19 sees 12p per month more revenue for Openreach, 16p per month in 2019/20 and 14p per month in 2020/21.
It is possible that some of the price war around FTTC pricing is being fueled by the future cuts and as a way of getting take-up of superfast services into the 70% area for 2020/21 lower prices to encourage more ADSL/ADSL2+ people to upgrade may be the way forward. Certainly the drop of £1.51 per month in 2018/19 should hopefully mean the annual price rises will be skipped and while other costs may mean providers want to increase prices, increasing by just 10p a month is enough to trigger the 'get out of jail free' card for those in contract and thus they may want to avoid the increased churn, or alternatively could gamble that a small rise will be acceptable, especially if wrapped in messaging about improving customer service and peak time speed improvements.
The charge controls do not affect the GEA-FTTP, G.fast or faster VDSL2 services from Openreach and no-one talks about the 40/2 product, which after the changes in 2017 pretty much no one sells anymore.