Openreach proposes lower full fibre pricing to encourage take-up
The Openreach FTTP roll-out has seen the GEA-FTTP footprint double in the last year and should continue to accelerate as they aim for a footprint of four million premises by March 2021. At end of Q2 2019 the network operator declared premises passed at 1.5 million and as of last night we had their footprint counting at 1,358,848 premises passed and growing at a rate of between 20,000 to 25,000 per week.
Premises passed is of course useless if no one signs up to the new services and one aspect of this is the Fibre First bulk migrations that will see areas migrating from VDSL2 services to FTTP. Another aspect is to make the price of the FTTP products attractive such that people will happily sign up for the upgrades and choose a higher speed product too.
So in terms of making the pricing attractive we have some price reductions that vary between 6% and 36% depending on the product. The regulated price in FTTC not-spots is not changing, that needs Ofcom as regulator to make a change. Also the new prices while they are proposed to take effect from 1st September 2019 are just proposals, i.e. it is possible that there may be objections that stop the changes or might even push them lower.
For the public reading this thinking they will be able to get a 330 Mbps FTTP service for £24.28+VAT per month, remember that these prices only cover the cost between the fibre in the premises and the handover hardware at one of 1,300 exchanges. The ISP has to have its own network or use a wholesale network to get the data from that point to the Internet, of course there is the possibility that a LLU operator seeking to build a large market share may be able to do this very cheaply and just maybe we might see 330 Mbps retailing at £39.99/m but this would probably mean visible contention kicking in at peak times.
|Data only product|
All prices are monthly and exclude VAT
|Current Price||Proposed Price||% change|
|40 Mbps / 10 Mbps in FTTC notspots (regulated)||£12.28||£12.28||0%|
|40 Mbps / 10 Mbps in FTTC areas||£15.79||£14.28||-10%|
|55 Mbps / 10 Mbps||£16.79||£16.79||0%|
|80 Mbps / 20 Mbps||£18.34||£17.28||-6%|
|110 Mbps / 15 Mbps||£21.54||£17.28||-20%|
|160 Mbps / 30 Mbps||£21.14||£21.14||0%|
|220 Mbps / 20 Mbps||£24||£21.28||-11%|
|330 Mbps / 50 Mbps||£38||£24.28||-36%|
|550 Mbps / 75 Mbps||POA||New|
|1000 Mbps / 115 Mbps||POA||New|
On the non-regulated services the conneciton price is increasing from £92 to £97.03, matching the regulated product. This does not apply to the 550 and 1000 tier which will have a different connection pricing regime.
This pricing does not require any volume commitment from providers so applies to big and small providers, though there is scope for negotation and provider specific pricing if they are willing to commit to volume targets.
For those keen to compare these figures with the GEA-FTTC service remember that the £5.13/m + VAT for the VDSL2 40/10 product does not include the copper line rental i.e. £7.70/m + VAT. So in areas where FTTC 40/10 is available the FTTP proposed price is £14.28/m versus £12.83/m for the older FTTC service, so FTTC is still cheaper, hence the regulated price in areas where the 40/10 product is not available. The bonus being if you switch to the FTTP product the distance based speed drop-off vanishes and it should be a lot more reliable i.e. no more 1 to 2 minute outages as the line resyncs.
The news that a more consumer friendly pricing will appear for the 500 and 1000 Mbps will probably get more attention even though we don't know what the prices will be yet.