Sky, TalkTalk and Vodafone Moan of £140m Delay to Cheaper FTTC Broadband

high uk prices and costs

Broadband providers Vodafone, TalkTalk and Sky Broadband have complained that Ofcom‘s delay to the introduction of their recently proposed wholesale price reduction on Openreach‘s (BT) 40Mbps (10Mbps upload) Fibre-to-the-Cabinet (FTTC / VDSL2) service could cost consumers ?140 million.[1][2][3][4][5][6] On 31st March 2017 the telecoms regulator, Ofcom[7], launched their ‘2017 Wholesale Local Access Market Review’ and as part of that they proposed to make a number of changes to help “promote competition and protect consumers from high prices” (here[8]). One of those changes involved imposing a significant price reduction on Openreach[9]‘s 40/10 FTTC[10]fibre broadband” product, which Ofcom described as being the “most important package” for consumers.

fttc_40mbps_wholesale_price_ofcom The news should have been good but three of the markets largest telecoms operators – Sky Broadband[11], Vodafone[12] and TalkTalk[13] – have complained via the FT that Ofcom’s decision to delay the start of their review, until after a deal had been struck with BT over the future of Openreach, meant that their FTTC proposals arrived about a year late and this carries a cost.

A Vodafone Spokesperson said: “As a result of the 12-month delay in implementing this initial charge control and the subsequent delay in further reductions, UK consumers are being over-charged by around ?140m.

This windfall gain will allow Openreach to invest in FTTP[14] to cover a city the size of Cardiff or make a substantial contribution towards improving the quality of rural broadband.”

Openreach has already complained that the proposed price cut does “not appear to incentivise more investment in ‘full fibre’ networks,” which is a big part of what Ofcom hopes to achieve with their wider selection of regulatory changes, and they believe that their current prices are fair.

Meanwhile Ofcom has promised to evaluate the new claim, although off-hand we can’t recall many occasions in the past where rivals have complained about the hypothetical impact of a delayed review in quite this way.

It will be interesting to see if the regulator makes any related changes when they issue their final statement during early 2018.

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References

  1. ^ Vodafone (www.ispreview.co.uk)
  2. ^ TalkTalk (www.ispreview.co.uk)
  3. ^ Sky Broadband (www.ispreview.co.uk)
  4. ^ Ofcom (www.ofcom.org.uk)
  5. ^ Openreach (www.openreach.co.uk)
  6. ^ FTTC (www.ispreview.co.uk)
  7. ^ Ofcom (www.ofcom.org.uk)
  8. ^ here (www.ispreview.co.uk)
  9. ^ Openreach (www.openreach.co.uk)
  10. ^ FTTC (www.ispreview.co.uk)
  11. ^ Sky Broadband (www.ispreview.co.uk)
  12. ^ Vodafone (www.ispreview.co.uk)
  13. ^ TalkTalk (www.ispreview.co.uk)
  14. ^ FTTP (www.ispreview.co.uk)

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