A massive change is coming that should increase the number of people being switched to faster full-fibre broadband later this year. BT’s Openreach network, which is rolling out ultrafast broadband across the UK, wants to hand out steep discounts to other Internet Service Providers (ISPs) that decide to move to this future-proofed new network.
The new pricing scheme, dubbed Equinox, is being reviewed by regulator Ofcom and is expected to go live by October 2021. For some ISPs, this hefty discount could mean cutting the cost of renting broadband infrastructure from Openreach by as much as a third.
A number of popular broadband companies, including Sky, TalkTalk, Vodafone, and of course BT itself, use the Openreach network – meaning if the plan goes ahead, your fibre broadband could be about to get much cheaper for them to use. The only condition? To secure the discount, ISPs must take advantage of the new fibre infrastructure.
That’s a huge incentive for companies like Sky, TalkTalk and Vodafone to switch their customers to the new, faster broadband lines as soon as possible. For customers struggling at home with slow speeds, that’s likely to result in a huge performance boost.
A future-proofed fibre connection is around 10 to 20 times faster than old copper cable connections. It’s also more reliable as the cables need less upkeep and don’t “throttle” the connection during heavy use.
The Equinox discount scheme is the latest part of of BT’s ambitious £15 billion investment into fibre broadband. BT hopes the new pricing will encourage more ISPs to switch to full fibre broadband, FTTP, and pass on the lower costs to their customers.
What’s in it for BT? Well, it has an ambitious goal to connect 80 percent of all British homes and businesses to fibre by 2026. With just 21 percent of homes reached by full-fibre-to-premises, or FTTP, connections today, that means a big acceleration is needed – and what better way than to slash prices?
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However, the plan isn’t without its critics. Virgin Media O2 has accused BT of plotting to squeeze out competitors in a complaint to Ofcom. It believes consumers will shun smaller ISPs who can’t compete with Openreach’s bargain prices.
In its complaint, Virgin Media O2 said: “Openreach would subsequently have a clear incentive to surgically target further discounts, so as to exacerbate the competitive disadvantage of the alt-nets [small ISPs].”
The Independent Networks Cooperative Association, which represents a number of broadband providers that don’t rely on Openreach’s infrastructure, told Total Telecom the scheme will “almost certainly lead to medium- to long-term consumer harm, due to it having caused a reduction in competitive fibre infrastructure investment and deployment, reducing choice and innovation and likely resulting in higher prices for end consumers”.
Despite these concerns, Ofcom is likely to approve the plan. It said in a provision statement it did not think there would be a “ material adverse impact on competition”.
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If the new pricing goes ahead, it could lead to a much-needed boost to the government’s fumbled fibre targets. Prime Minister Boris Johnson’s 2019 election manifesto originally promised every home in the country would get FTTP by 2025.
However, that plan was soon watered down, thanks to the hassle of digging up roads and the cost of upgrading the existing network.
The government is now so desperate to roll out fibre it’s splashing out £4m on a trial to run fibre cables through water pipes in hard-to-reach areas.
Digital minister Matt Warman said of the plan: “The cost of digging up roads and land is the biggest obstacle telecoms companies face when connecting hard-to-reach areas to better broadband, but beneath our feet there is a vast network of pipes reaching virtually every building in the country.
“So we are calling on Britain’s brilliant innovators to help us use this infrastructure to serve a dual purpose of serving up not just fresh and clean water but also lightning-fast digital connectivity.”
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