Ofcom publishes market review of wholesale fixed telecoms

Ofcom has today confirmed how it will regulate the wholesale telecoms markets, used to deliver broadband, mobile and business connections in the UK, for the next five years and beyond. The regulator said that these measures would “help shape the UK’s full-fibre future”.

The Wholesale Fixed Telecoms Market Review 2021-26 outlined ways in which the regulator will prevent anti-competitive behaviour. Ofcom will prevent Openreach from “harming competition” by reviewing wholesale customer discounts and restricting them if they “could stifle investment by its rivals”.

Ofcom has also decided to extend Openreach’s ban on offering geographic discounts to its full fibre services. This previously only applied to Openreach’s superfast broadband wholesale services.

In addition, Openreach’s fibre services will continue to be free from pricing regulation, and the company can also charge more for regulated products that are delivered over full fibre instead of copper.

Ofcom said “this approach encourages investment by providing BT and its rivals with a margin to build the new networks” whilst ensuring “people can still access affordable broadband”.

Dame Melanie Dawes, chief executive, Ofcom, explained, “It’s time to ramp up the rollout of better broadband across the UK. We’re playing our part – setting the right conditions for companies to step up and invest in the country’s full-fibre future. This is a once-in-a-century chance to help make the UK a world-leading digital economy.”

Paul Stobart, CEO of Zen Internet, said these measures will increase competition and investment, as well as helping bring fibre to rural areas. “The 2020s is undoubtedly going to be the decade of full fibre. Ofcom’s decision to regulate the pricing for further roll outs in the UK, in line with previous guidelines, is something that we welcome at Zen. The benefits of full fibre are undeniable for the UK and make regulations such as this increasingly important for enabling and supporting the likes of Openreach to be able to invest in its infrastructure at pace. In particular, this will help connect the people that need it, especially those in rural areas that are at risk of being left behind.

He added that increased access to Openreach’s telegraph poles and underground cable ducts for alternative providers is another welcome measure. “In order for the UK to truly ensure everyone has access to choice, value and quality when it comes to connectivity, the industry needs increased competition and investment. This is something alternate providers like CityFibre will undoubtedly supply.”

Clive Selley, CEO, Openreach, said that these measures would help the company speed up fibre deployment. He said, “Today’s regulation will allow us to ramp up to 3 million premises per year providing vital next generation connectivity for homes and business right across the UK. We’ve now passed almost 4.5 million premises and are building faster, at lower cost and higher quality than anyone else in the UK.”