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National broadband network builder Openreach is aiming to slash the wholesale costs of fibre-to-the-cabinet (FTTC) and fibre-to-the-premises (FTTP) broadband services to give its communication service provider (CSP) customers an incentive to upgrade their users to super- and ultrafast broadband.
The offer will be made open to all CSP customers, including smaller altnets, who will be able to sign up for either three- or five-year plans, with five distinct discount tiers organised according to a commitment to a specific take-up rate of fibre-based broadband products with Openreach.
Openreach said by encouraging more adoption of both FTTC and FTTP, it would be able to deliver more money back into Broadband Delivery UK (BDUK) through the gainshare mechanisms built into its contracts – meaning the roll-out of fibre-based broadband (not necessarily full-fibre) can be extended beyond current levels of just over 95% coverage.
“We’ve invested more than £11bn 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,” said Openreach CEO Clive Selley.
“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.”
The cuts have been agreed after lengthy negotiations between Openreach and its CSPs, and are designed to safeguard equivalence and competition in the market, with the new regime guaranteeing pricing certainty over the chosen period from 21 August 2018.
Openreach said the discounts go beyond Ofcom’s existing pricing controls on its wholesale superfast products, and said that it could ultimately see the majority of homes and business upgraded onto superfast and ultrafast products by 2023. Currently, 10 million homes and businesses take a superfast service delivered on the Openreach network, but 18 million more could do so if they chose.