• Openreach’s offer could give providers monthly discounts of up to £9.50 for each qualifying customer for as long as 30 months
  • Ofcom is not proposing action against Openreach’s other notified commercial offers

The fact

Ofcom has proposed ordering Openreach to withdraw its Incremental New to Openreach Customer Offer. If confirmed, it would be the first time the regulator has blocked one of Openreach’s notified commercial offers. The consultation closes on 27 August, and Ofcom expects to make a final decision by the end of September. Openreach cannot launch the offer while the review is under way.

The offer would give broadband providers monthly discounts of up to £9.50 for each qualifying full-fibre customer added above their usual sign-up level. The discounts could run for as long as 30 months. Ofcom provisionally found that the charges were not fair and reasonable because they targeted customers that competing fibre networks also need to win. It is not proposing to block Openreach’s separate geographic or higher-speed connection discounts.

The assessment

Openreach’s offer would reward broadband providers for placing more full-fibre orders on its network than they normally would. Rival fibre operators depend on orders from those providers to generate wholesale revenue from the networks they have built.

A discount of up to £9.50 per month for up to 30 months could be difficult for smaller networks to match. Ofcom has not concluded that Openreach’s other discounts are unfair. Its concern is that this offer applies its strongest incentive to the additional connections that rival networks are also trying to secure.

For BTW readers, the decision will determine how far Openreach can use targeted volume discounts to compete for new wholesale connections. A final block would require it to change or withdraw the offer before broadband providers could use it.

What to watch

Ofcom will accept consultation responses until 27 August and expects to issue its final decision by the end of September. Watch whether it requires Openreach to withdraw the offer entirely or permits revised terms covering the discount level, duration or qualifying order volumes.