UK to Boost Broadband Competition While Capping Openreach Charges, Says Ofcom

Britain should maintain competition in the high-speed broadband market to expand full-fibre coverage to 96% of premises by 2027, while also implementing price caps on certain slower-speed services, according to Ofcom. The regulator’s latest proposal aims to strike a balance between promoting investment and ensuring affordability for consumers, per Reuters.

Four years ago, Ofcom introduced measures to encourage the development of gigabit-capable networks by facilitating competition and granting new entrants access to Openreach’s infrastructure, including ducts and telegraph poles. These steps contributed to a significant increase in full-fibre network coverage, rising from under 25% of premises to nearly 70%, Ofcom reported.

As part of its new regulatory framework, Ofcom proposed maintaining price freedom for high-speed broadband services for five years starting in 2026. However, in an effort to protect consumers using copper-fibre connections offering speeds of up to 80Mbit/s, it plans to cap the price that Openreach can charge retail providers such as Sky and TalkTalk. This cap marks an increase from the current 40Mbit/s threshold, ensuring affordability for customers still reliant on older infrastructure, according to Reuters.

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In remote regions where commercial networks struggle to turn a profit, Ofcom indicated that it would support investment by Openreach to extend broadband access. Openreach responded positively, highlighting the importance of regulatory certainty to sustain its investments. “At first glance, these proposals offer broad continuity, but we’ll be engaging closely with Ofcom on the details,” said Mark Shurmer, Openreach’s regulation director.

BT, Openreach’s parent company, saw a slight market boost following the announcement, with its shares rising 1.3% in morning trading.

Ofcom’s previous regulatory strategy spurred significant investment from alternative network providers, commonly known as “altnets.” CityFibre, a leading altnet that has secured Sky as a customer, credited Ofcom’s support for wholesale network competition with delivering improved services, increased consumer choice, and reduced costs. “We fully support Ofcom’s direction and look forward to working together to ensure the UK benefits from a thriving, sustainable digital infrastructure market,” said Greg Mesch, CityFibre’s chief executive.

Source: Reuters