Ofcom reaches its decision on Openreach wholesale fibre pricing
UK communications regulator, Ofcom has published its decision not to prevent Openreach from introducing its new pricing offer for full-fibre broadband, known as ‘Equinox 2’.
The new pricing plan was originally put forward in December, with the aim of lowering the price of full fibre products for internet service provider (ISP) customers, as well as the cost of migrating customers away from copper. The consultation about Equinox 2 closed on 4 March and Ofcom had planned to publish its final decision by the end of March. But it said at the time that it had received “a number of detailed and extensive responses to the consultation, some of which raise issues that require further assessment. In order to assess these issues properly, we intend to gather and analyse some additional information.”
The regulator has now said in a statement, that “having carefully assessed the range of evidence available to us – including responses to our public consultation – we have decided not to prevent Equinox 2 from being introduced.” It went on to say that Openreach must notify Ofcom of certain offers before they come into effect so that they can be assessed prior to introduction and, if necessary allow for intervention to prevent them from being introduced.
Ofcom said that it considered the impact on citizens and consumers, alternative networks, internet service providers (ISPs), and Openreach itself, on reaching its decision. An Ofcom spokesperson said: “Our overriding objective is to bring better broadband to people across the UK, by promoting competitive investment in high-speed networks and making sure there’s a level playing field for all companies. With this in mind, and based on the evidence available to us, we don’t consider Openreach’s new pricing discounts to be anti-competitive.”
The regulator went on to reveal that it had considered the level of prices under Equinox 2, and concerns among some market participants about Openreach’s practice of discussing and developing discounts with retail providers. However, it said that, having carefully assessed information from providers and altnets, it does not currently have concerns that warrant further investigation. What’s more, Openreach informed Ofcom that – in response to concerns raised – it plans to make certain commitments regarding its future conduct, including not having any current plans to change its Equinox 2 rental prices and no intention to initiate further changes until at least 31 March 2026.
Unsurprisingly, representatives from some of the UK's alternative network operators (altnets) have been quick to respons. Malcolm Corbett, CEO at the Independent Networks Cooperative Association (INCA) stated: “Whilst we are still reviewing Ofcom’s statement in full, INCA is initially disappointed with Ofcom’s decision. Not only do we believe that this outcome will have a negative impact on competition and investment and ultimately consumers, we also believe that Ofcom’s approach to taking this decision was flawed. This initially seems to be an illogical decision based on a questionable process. Government policy and regulatory decision making now appear to us to be out of sync when it comes to infrastructure competition. We call on government to clarify its Statement of Strategic Priorities to Ofcom to ensure that the regulator is compelled to put issues of infrastructure competition and investment at the heart of its decision-making process.”
Greg Mesch, CEO at independent operator, CityFibre has also issued a response, saying: “We are disappointed Equinox 2 has been approved and will be undertaking a thorough review of Ofcom’s decision. We are, however, pleased to see Ofcom’s pressure has brought about the end of Equinox, with a commitment from Openreach to make no further changes to its wholesale pricing until April 2026. We must not forget that while introducing price discounts to bind its wholesale customers and damage emerging competition, BT is at the same time significantly increasing prices for millions of its retail consumers. Ofcom must ensure that competition is effective and sustainable if consumers are to benefit.”
Tom Williams, CEO and Co-Founder of alternative operator, Lit Fibre responds: “Ofcom's approval of Openreach's Equinox 2 scheme is not surprising, but we question whether this will really lead to consumer benefit or just prove to be a margin boost to the large retail ISP’s using Openreach’s network. Lit Fibre builds its own network and sells services direct to consumers which means we can always provide the best level of service for the best price. Our promise to customers is never to introduce mid-contract price hikes, assuring our customers that they really are getting the best price from the outset.”