New Gigabit pricing for BT Wholesale FTTP revealed
Some had a hope that BT Wholesale with the revamped 500 Mbps and Gigabit speed tiers would try to be more competitive to products like the Virgin Gig1, Vodafone Gigafast, Gigaclear and Hyperoptic services but the list pricing is going to be a disappointment for them.
- Data Only WBC-FTTP 500 Mbps down and 75 Mbps up £50+VAT per month as of 1st April 2020
- Data Only WBC FTTP 500 Mbps down and 165 Mbps up £90+VAT per month
- Data Only WBC FTTP 1000 Mbps down and 115 Mbps up £75+VAT per month as of 1st April 2020
- Data Only WBC FTTP 1000 Mbps down and 220 Mbps up £135+VAT per month
The 500/75 product once you add VAT is £60 per month and remember this is the wholesale pricing, so there is the costs of usage to add as well as billing, support and all the other elements that make up a retail broadband service such as content blocking, parental controls, broadband hardware.
Those providers who buy direct from Openreach will likely undercut this pricing i.e. the investment in backhaul networks that was a large part of the LLU roll-outs will continue to allow them to offer lower pricing once all the retail costs are added. Openreach pricing is £27.28+VAT per month for both the 500/75 and 1000/115 product.
While BT Consumer can afford due to the scale of its operations to operate with minimal additional costs, for the long tail of small and providers who have relied on BT Wholesale in the past it will be harder to spread out the costs e.g. much higher average usage from FTTP customers buying the 500 and 1000 tiers. This might drive more of the smaller providers into the arms of TalkTalk Wholesale if they can deliver the right quality of service and price points.
One of the ironies of the UK broadband market place and regulatory environment is that if BT Wholesale was to have list pricing that undercut others the pricing would very quickly be blocked. Not a problem for those in areas with multiple wholesalers, but for those where BT Wholesale is the only option this is going to be a problem. This leads onto market regulation and what Ofcom should do with respects to both final mile pricing and wholesale pricing that covers the middle mile from local handover points to core network.