Skip to main content
Jump to navigation
bt openreach

Openreach has acknowledged that broadband customers could have to pay more for internet services if major infrastructure upgrades are to go ahead.

The body has recently been consulting with communication providers (CPs) on the possibility of building a large-scale fibre-to-the-premises (FTTP) network across the UK.

Stakeholders in the industry broadly agree that this would ensure the country's position as a leading digital economy.

However, Openreach, Ofcom, ministers and CPs need to agree how investment costs can be fairly recovered before committing to any major project.

"Openreach will need to recover the costs of a very large investment in a new, faster and more reliable network in the wholesale prices it charges to CPs," the body said.

"A large-scale FTTP network is likely to benefit a broad set of customers over time, so Openreach believes the costs should be spread fairly across a broad customer base to reflect that."

Openreach said this would help to keep down any wholesale price increases required to support the investment case, while CPs would benefit from cost savings because the network would be more reliable.

The infrastructure body went on to state that CPs accept that charging a large premium for ultrafast services alone is unlikely to succeed.

However, it said they question "how much more customers will be willing to pay for the same headline speeds on a better platform". 

According to estimates from Openreach, building FTTP connections to ten million premises by the mid-2020s would cost between £3 billion and £6 billion.

As a result, it believes that deciding how that investment can be recovered fairly through wholesale pricing will be "critical to making a commercial case work".

Clive Selley, Chief Executive of Openreach, insisted it does want to proceed with a large-scale fibre deployment, but stressed it cannot do it alone.

Furthermore, he said it is "under no illusions about the challenges that lie ahead", as it needs to build a business case that is workable and fair for everybody.

"That means we need a regulatory environment that encourages investment, and we need to agree how the costs of such a huge engineering project can be recovered fairly from all those that stand to benefit," he commented.

Mr Selley acknowledged this will be difficult, but said the prize for CPs, their customers and the UK as a whole "could be huge".

Join the conversation

comments powered by Disqus

Stay up to date

  • Google+ Follow uSwitchTech
  • Subscribe to our RSS feed

Latest Comments

Search news