Openreach cuts wholesale broadband costs for providers

The price reduction will encourage more providers to offer superfast broadband to UK homes and businesses

Broadband infrastructure firm Openreach plans to significantly cut the wholesale prices of its fibre-to-the-cabinet (FTTC) and fibre-to-the-premises (FTTP) services to encourage communications providers to speed up their deployment of faster broadband.

At the moment, some providers are being held back from being able to offer a solid broadband service to customers because they don't have the budget to grow their networks. Offering cheaper infrastructure will enable even the smaller firms to roll out better coverage levels, Openreach hopes. 

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While 10 million households and businesses have upgraded to superfast broadband, but Ofcom thinks this could quickly rise by four million (the number of potential standard broadband customers not currently in a fixed contract with a provider) if Openreach reduces its wholesale prices.

Openreach believes that by slashing prices for providers to use its network, the majority of homes and businesses will be using superfast and ultrafast broadband by 2023.

"We've invested more than 11 billion into our network over the past decade, and while that's helped the UK become a global digital leader, there are still millions more homes and businesses that could benefit from the better broadband infrastructure we've built," Openreach CEO Clive Selley said.

"This offer is a win/win for communications providers, their customers and Openreach. It will help Britain's homes and businesses to experience the benefits of faster and more reliable broadband. And it will incentivise our wholesale customers to participate in our long-term investment in digital infrastructure by upgrading more of their customers to superfast and ultrafast services."

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The extra money banked from increased provider take-up will allow Openreach to plough money into Broadband Delivery UK (BDUK) that supports the rollout of superfast broadband infrastructure in areas that don't already have the luxury.

Richard Neudegg, head of regulation at uSwitch.com, said that by going beyond Ofcom's recommendations, Openreach's move should enable providers to encourage more of the four million out-of-contract broadband customers to move onto superfast broadband.

"The key here is that in order to benefit from these cost savings, providers using Openreach infrastructure will have to increase the number of their fibre customers," he said.

"Superfast broadband is often cheaper for customers to upgrade to when they are out-of-contract and on standard broadband services - in fact broadband customers are currently spending 222 million annually to stay on slower speeds."

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