According to new research, some 12 million households could experience broadband price hikes later this year as suppliers look to cover the rising costs of full fiber rollout.
On July 1, Openreach raised its prices on 23 of its 26 broadband options in a bid to force providers to offer three entry-level full-fiber services as it tries to meet its latest rollout targets, according to data from broadband provider Cuckoo.
As full fiber is only available to 24 per cent of UK households, this means that millions of Openreach customers who do not have a fiber contract may be faced with more expensive services.
However, Openreach states that it still offers good value for money – and that providers ultimately set their own prices.
Openreach is by Cuckoo. accused of raising its prices to force providers on full fiber
What has changed?
Openreach has raised the prices of all the old copper wiring rental charges known as FTTC (Fibre-To-The-Cabinet), which is currently used by most UK households.
It then cut the cost of the entry-level full fiber optic known as FTTP (Fibre-To-The-Premises), which is currently only available to 24.3 percent of UK households.
Cuckoo says the purpose of this price increase is to encourage broadband providers to move from legacy FTTC rental options to entry-level full-fiber alternatives.
What is FTTP and FTTC?
FTP: Fiber-to-the-premises is a broadband connection used by ISPs that uses fiber optic cables directly connected to the user’s home.
FTTC: Fiber-to-the-cabinet, on the other hand, uses a full fiber optic connection from the provider to the cabinets, which are usually located on the street, and copper wire from the cabinet to the user’s home.
It argues that the attempt to incentivize carriers to move to full fiber could hit customers the hardest, as those not yet receiving their internet through entry-level full fiber could see their prices rise.
This also applies to those who have no choice as FTTP is not yet available in their area.
It added that Openreach failed to meet many of its goals, including in 2009, when BT, still affiliated with Openreach, committed to making FTTP available to 2.5 million UK branches by 2012.
However, in 2013, the telecom giant dropped these plans and two years later, only 250,000 households were still connected to full-fibre broadband.
Openreach has argued that their prices remain competitive and that prices are set by providers
As a result, after the Openreach pricing change announced in March, several major ISPs have increased the prices of their services.
TalkTalk has increased prices by more than £30 a year, while Plusnet is increasing its broadband package by 5.4 percent, affecting nearly one in five consumers.
This suggests that despite BT’s offer to cut service provider rates earlier this month for some full fiber rental speeds, millions of FTTC customers could still face more expensive rates.
Alexander Fitzgerald, founder and CEO of Cuckoo, said: “BT bosses need to be honest with shareholders about their past mistakes and apologize to households who have to foot the bill.
“At a time when the pandemic has hit families across the country, they are earning better than higher broadband bills, completely through no fault of their own.”
What does Openreach say?
However, Openreach said that most of its products and services are regulated, meaning its customers get equivalent prices and terms regardless of who buys them.
It added that it is always the providers who set their own selling prices, meaning they choose whether to pass the extra costs on to customers. Openreach said that for typical customers, there would be an increase of less than 12p per month in costs incurred by Openreach to a provider.
The company also said no other company is building Full Fiber broadband “faster, further or at a higher quality” than Openreach.
It believes it is well on track to reach 25 million buildings by December 2026 and is making the technology available to 43,000 homes and businesses each week, with more than five million homes and businesses already able to place an order.
Openreach said no other company builds ‘higher quality’ Full Fiber broadband
Best broadband deals on the market
Below, with the help of Decision Tech, This is Money has put together some of the best broadband deals on the market today.
The cheapest offer at the moment is with plus net on its Unlimited Broadband package costs £18.95 per month for 18 months with no installation fees.
Those who sign up will also get a £60 Plusnet Reward card. The deal will expire on July 21st so click here to sign up now.
chats is offering a cheap deal on its Fiber 65 plan at £22 per month for 18 months.
Those who sign up will also get a £80 voucher, but the deal ends July 21. Click here participate.
plus net also offer two of the other cheapest deals on their Unlimited Fiber and Unlimited Fiber Extra plans, which cost £21.95 and £23.95 respectively.
Both are 18-month contracts with no start-up fees and will end on August 4.
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