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Wholesale discounts to help Britain upgrade its broadband

23 Jul 2018

Better deals to help communication providers improve the network

We’re introducing a new offer which encourages communication providers (CPs) to upgrade a large proportion of the country’s homes and businesses to better broadband services, nationwide.

The offer – which covers our fibre-to-the-premises1 (FTTP) and fibre-to-the-cabinet (FTTC) wholesale services – is the result of several months of work and discussions with CPs and gives them access to long-term discounts in return for upgrading their customers from predominantly copper-based services.

Discounts designed to encourage upgrades

The discounts go beyond the regulator Ofcom’s pricing controls on our superfast broadband products, and they’ll allow CPs to encourage more of their customers onto better services. Ultimately, it should see the vast majority of Britain’s homes and businesses upgraded onto superfast and ultrafast2 broadband platforms within five years.

Upgrading more consumers and businesses onto superfast and ultrafast services would also deliver higher returns for taxpayers through more than 40 subsidised broadband projects being delivered by Openreach across the country. Under a gainshare3 mechanism agreed in these contracts, higher adoption rates trigger increased returns for councils, which can in turn be ploughed back into upgrading remaining broadband not-spots.

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"This offer will help Britain’s homes and businesses experience the benefits of faster and more reliable broadband."

A win-win offer for all

Clive Selley, CEO Openreach, said: “We’ve invested more than 11 billion pounds into our network over the last decade. And whilst that’s helped the UK become a global digital leader, there are still millions more homes and businesses that could benefit from the better broadband infrastructure we’ve built.

“This offer is a win/win for communications providers, their customers and Openreach. It will help Britain’s homes and businesses to experience the benefits of faster and more reliable broadband. And it will incentivise our wholesale customers to participate in our long-term investment in digital infrastructure by upgrading more of their customers to superfast and ultrafast services.”

Image of engineer working on fibre in Portland

We can still reach more people

So far, 10 million households and businesses have upgraded to superfast broadband on the Openreach network, but such services are available to almost 28 million British premises. In May, industry regulator Ofcom highlighted how roughly four million homes with standard copper broadband connections could upgrade to superfast services for the same price or less.

We’ve been holding extensive discussions with CPs – exploring ideas and growth opportunities – and listening carefully to their priorities. As a result it has created an offer that we believe safeguards equivalence and competition in the market, with the new wholesale prices available to all CPs from 21st August, and certainty on those prices for a period of three or five years.

Who can take up the offer?

The offer is available to any CP – including small CPs – that grows its FTTC and FTTP customer base on our superfast or ultrafast network by an agreed proportion over a three- or five-year period. Details of the pricing tiers can be found here.

This type of deal – with CPs committing to customer volumes in exchange for great value pricing – could help unlock further investment in ultrafast FTTP broadband. The offer announced today includes the use of our existing FTTP technology in some parts of the country and it gives CPs the opportunity to offer FTTP to their customers at very competitive prices.

 

Footnotes

1 This includes the existing FTTP network and future build outside of our Fibre First programme.

2 Superfast means download speeds of 24Mbps and above – enough bandwidth to stream around five HD movies simultaneously – while Ultrafast means speeds of 100Mbps and above, which is more than twice the UK average speed of 46Mbps.

3 Under the terms of the Broadband Delivery UK (BDUK) programme, we’ve committed to repay or reinvest grant funding depending on factors including when customer adoption of the new services we’ve built passes beyond the 20 per cent mark in related areas. This funding can be reinvested to further improve coverage and speeds via future contracts. As of March 2018, BT has made provision for £528m to be returned over the lifetime of the contracts and £80m of this has already been committed – earlier than required – to improve speeds and coverage in certain areas.