Ofcom: Openreach’s ‘Equinox 2’ scheme is not anti-competitive

Britain’s communications regulator has said it does not provisionally intend to stop Openreach’s plan to offer customers wholesale fibre at discounted rates.

Ofcom said the Equinox 2′ scheme announced by BT’s networking arm in December is ‘not anti-competitive’ and aligns with the watchdog’s goal to enhance investment in high-speed broadband networks.

Under the proposal, internet service providers can get Openreach’s gigabit-capable fibre-to-the-premises broadband products from the beginning of April at monthly prices that are up to 15 per cent cheaper.

For example, those currently using the one-gigabit ‘Equinox 1’ rental plan pay £22.64 per month but will spend just £21.30 each month should they upgrade to the new offer.

Openreach hopes the strategy will help it retain existing clients, including TalkTalk, Sky and Vodafone, whilst continuing to attract fresh ones and encouraging them to accelerate their transition from copper to full fibre.

But the measure has received significant opposition from rival telecoms businesses such as Virgin Media and O2, which called on Ofcom to examine whether the proposal would threaten future investment and fair competition.

Having assessed the deal, the media regulator has confirmed it will not intervene to prevent Equinox 2 from being introduced, although affected parties are being invited to respond to a consultation on the matter.

An Ofcom spokesperson said: ‘Our overriding objective is to bring faster, better broadband to people across the UK – promoting competition and investment in high-speed networks, and making sure there’s a level playing field for all companies.

‘With this in mind, we’ve assessed Openreach’s proposed new pricing plans and, based on the evidence available to us so far, we don’t consider them to be anti-competitive.

‘We’ve set out our provisional reasons for this and are now seeking views from all interested parties, which we’ll take into account before making a final decision.’

Those wishing to register their opinions have until 5pm on 4 March to respond to Ofcom’s consultation before the regulator makes its judgement later in the month.

Should it give the scheme the green light, it would mark the second time Openreach has lowered prices on its wholesale offering in two years.

Since October 2021, the firm has granted wholesale ISP customers a decade-long fixed price and cheaper rates for its full-fibre products as long as they commit to cease selling fibre-to-the-cabinet or purely copper products.

The pricing structure was unsuccessfully challenged by Virgin Media O2 and alternative network provider CityFibre, who argued the measure was uncompetitive.

BT Group is facing a significant challenge to stop losing clients to ‘altnets,’ many of whom are backed with billions of pounds by private equity houses and are rapidly laying broadband fibre cables across British towns and cities.

In third-quarter results released on Thursday, the company revealed Openreach had extended its full-fibre network to another 810,000 premises and had achieved 38 per cent of its target to reach 25 million homes.

On Friday, BT Group shares were up 0.8 per cent at 133.4p during the late morning, yet their value has declined by about a third in the past 12 months.