Openreach, BT move to cut cost of FTTP in the UK

The cost of fibre broadband is coming down in the UK, or so we’re led to believe.

Thursday brought two separate announcements from incumbent operator BT and its independent network arm Openreach that will essentially reduce the price of fibre broadband subscriptions for many people over the coming years.

BT has launched Home Essentials, a low-cost fibre broadband package aimed at low-income users. It is available to customers Universal Credit – the UK’s social security plan – and other means-tested benefits, and offers fibre broadband and calls for £15 per month, which is just about half the price they would normally pay for an equivalent plan; BT puts the savings at £240 per year.

According to BT’s consumer CEO Marc Allera, the plan could help as many as 4.6 million UK families. “Fast, reliable connectivity to access vital online services – and keep in touch with loved ones – is more important than ever,” he noted.

Indeed, the move comes in the wake of the Covid-19 pandemic and in anticipation of the financial hardship that is likely to follow for many.

“We’re also working hard to train all 12,000 of our contact centre colleagues so they can better support customers who might need a little more help,” Allera added. Amongst other things, staff will be trained to help them identify customers who require assistance.

“With one in five people telling us the pandemic has left them needing more support, our role is more important than ever,” Allera said, referring to research carried out by the UK incumbent to support the Home Essentials launch.

56% of respondents to a survey of 2,000 people carried out by BT in April said they feel more vulnerable compared with the start of the pandemic in one or more of the following areas: mental health (35%), physical health (35%), financial circumstances (30%) and employment prospects (27%). Meanwhile, 22% of respondents – which scales up to 12 million people at a national level – said they now need additional support due to unexpected life changes brought about by the pandemic.

BT’s approach is not new: there are similar schemes operational in many international markets. But coming as it does at what we hope is the tail end of a global pandemic, it is particularly timely.

As is Thursday’s announcement from Openreach that is making a long-term full fibre pricing offer to its retail customers, essentially to persuade them to encourage their end users to move to fibre.

Openreach is not exactly saying ‘lower prices’ here, but that’s the implication; in addition to pricing certainty, which will help the retailers with their own pricing plans, the network operator has committed to what it terms competitive prices. Specifically, “prices will be competitive whilst offering a fair return for Openreach,” the operator said.

“We’re determined to make full fibre the default option for customers throughout the UK, so we’ve been working closely with communications providers to offer simple and competitive pricing which gives them the long-term certainty and flexibility they need,” said Katie Milligan, Managing Director of Customer, Commercials and Propositions at Openreach.

“We believe this offer makes full fibre a must-have for every home and business, and it means more people could start benefiting from our most revolutionary and reliable broadband sooner,” she said.

Retail providers will be able to take up the offer between 1 October and 30 March next year, with the pricing certainty element running until 30 September 2031.

Presuming there are no objections from Ofcom, which will consult on the new plan, the UK can look forward to more competitive broadband offers from Openreach’s retailers in the coming years, as they seek to push consumers onto fibre-to-the-premises (FTTP).

It’s coming down, it’s coming down, it’s coming, fibre’s coming down… Sorry, got a bit carried away there.