The UK communications regulator Ofcom is to allow discounted pricing of wholesale full fibre provision for the Openreach network, in a ruling likely to anger some altnets (alternative network suppliers).
Ofcom on Wednesday announced that it has decided not to prevent Openreach from introducing its new lower pricing offer for its full-fibre broadband provision, known as ‘Equinox 2’.
This means that Openreach that can offer discounted rates to Internet Service Providers that utilise the Openreach network for their own Fibre-to-the-Premises (FTTP) based broadband products.
Whilst the discounted rates for ISPs sounds like a good thing, in the telecoms world it is likely to anger a number of alternative network suppliers.
Back in December Openreach had notified Ofcom of a new pricing offer for its full-fibre services (Equinox 2). This offer gives lower prices to ISPs – such as BT, Sky, TalkTalk and Vodafone – if they agree to use mainly Openreach’s full-fibre products for new orders instead of its legacy copper products.
“Having carefully assessed the range of evidence available to us – including responses to our public consultation – we have decided not to prevent Equinox 2 from being introduced,” said Ofcom.
The UK communications regulator decided that “Equinox 2 is consistent with promoting investment in gigabit-capable networks by Openreach and other operators and promoting network-based competition, ultimately delivering better consumer outcomes.”
It added that as a result of Equinox 2, ‘altnets’ are likely to face stronger competition from Openreach. However, Ofcom said that it had concluded that the conditional terms in the offer do not create a potential barrier to using altnets. “Our conclusion is therefore that Equinox 2 is consistent with network-based competition,” it said.
“Our overriding objective is to bring better broadband to people across the UK, by promoting competitive investment in high-speed networks and making sure there’s a level playing field for all companies,” an Ofcom spokesperson said.
“With this in mind, and based on the evidence available to us, we don’t consider Openreach’s new pricing discounts to be anti-competitive,” the spokesperson said.
The news will not be well received at alternative network supplier CityFibre, which provides full fibre connections to 2 million UK homes.
“We are disappointed Equinox 2 has been approved and will be undertaking a thorough review of Ofcom’s decision,” Greg Mesch, CEO of CityFibre told Silicon UK in an emailed statement.
“We are, however, pleased to see Ofcom’s pressure has brought about the end of Equinox, with a commitment from Openreach to make no further changes to its wholesale pricing until April 2026,” said Mesch.
“We must not forget that while introducing price discounts to bind its wholesale customers and damage emerging competition, BT is at the same time significantly increasing prices for millions of its retail consumers,” said Mesch. “Ofcom must ensure that competition is effective and sustainable if consumers are to benefit.”
Virgin Media O2 also got back to Silicon UK and expressed its views on Ofcom’s decision.
“Encouraging and supporting investment is crucial if Ofcom is to meet its own strategic priorities to drive fixed network competition at scale,” a Virgin Media O2 spokesperson told Silicon UK.
“While we’re pleased Ofcom took more time to review these proposals, it must be prepared to act decisively in future to keep BT in check and protect its own long-term objectives,” the spokesperson said.
“We are now carefully considering this decision.”
But some ISPs have welcomed Ofcom’s decision on the matter.
“We’re pleased to hear Ofcom has decided not to prevent Openreach from introducing Equinox 2 pricing,” Richard Tang, CEO of ISP Zen Internet told Silicon UK.
“We welcome any incentives that enable Zen to connect more of our customers to full fibre. Equinox 2, coupled with on-going investment from alternative network providers, will only help accelerate the UK’s journey to a full fibre nation,” said Tang.
“The offer is crucial in making full fibre broadband more accessible and affordable for millions of households across the UK, especially at a time when many are struggling with the cost-of-living crisis,” said Tang. “Zen is committed to working with Openreach, CityFibre and industry partners to accelerate the rollout of full fibre broadband and bring its benefits to as many people as possible.”