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    Ofcom moves to ensure Sky and TalkTalk fibre can undercut BT Consumer

    This is a discussion on Ofcom moves to ensure Sky and TalkTalk fibre can undercut BT Consumer within the General Computing and Internet forums, part of the Community channel category; thinkbroadband :: Ofcom moves to ensure Sky and TalkTalk fibre can undercut BT Consumer Ofcom has finally moved to define ...

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      Ofcom moves to ensure Sky and TalkTalk fibre can undercut BT Consumer

      thinkbroadband :: Ofcom moves to ensure Sky and TalkTalk fibre can undercut BT Consumer
      Ofcom has finally moved to define the policy to ensure that BT Consumer division does not operate with so low margins over the wholesale products that competitors cannot undercut BT Retail. This is the conclusion of round two of the decade old rules that paved the way for TalkTalk to launch its massively popular full LLU ADSL2+ service in 2006, and are now aimed at trying to ensure that the market share for fibre based broadband does not sit solely in the hands of BT Consumer. The market fear being that BT Consumer, BT Wholesale and Openreach could if allowed operate more like the many vertical operators across Europe.

      BT Consumer does have the lions share of the 3.4 million GEA-FTTC connections in the UK (and all but a handful of GEA-FTTP ones), but is running second place compared to the size of Virgin Media with their fibre based broadband services.

      "BT is currently the largest retail provider of fibre broadband services over its network, but is required to allow other operators to use its network to sell superfast broadband to consumers under a process known as ‘virtual unbundled local access’ (VULA).

      The draft regulatory condition notified by Ofcom to the Commission would require BT to ensure that the margin between its wholesale VULA charges and its retail superfast broadband prices is sufficient for rival operators to compete and make a profit."

      Extract from Ofcom statement
      The new rules which require BT Consumer to maintain a sufficient margin should ensure that Sky and TalkTalk will remain able to offer FTTC services below the cost of BT Consumer where they choose to do so. If anyone is worrying whether this means price rises at BT, don't panic the initial assessment from Ofcom is that BT is maintaining sufficient margin on its pricing for new customers.

      A major part of the assessment was the inclusion of various value-adds such as BT Sport. The more than 700,000 PlusNet have been considered, and the PlusNet fibre pricing is considered in the VULA margin.

      2015 is set to be an interesting year with the roll-out of the CityFibre/Sky/TalkTalk FTTP service in York, and Ofcom has actively decided to NOT apply the VULA margin test for GEA-FTTP (due to the small number of customers), which could make for an interesting price war in York if the two competing FTTP networks overlap. Another factor behind why GEA-FTTP was not considered is that TalkTalk and Sky do not utilise GEA-FTTP even though the backhaul links and Ethernet interfaces operate identically.

      So what for the future? Well the market practice of weekly changes to the incentives for signing up will continue, and with a little more certainty we might see even more aggressive offers from TalkTalk and Sky, with BT Consumer continuing its portfolio of full feature products at a higher price and using PlusNet to price match competitors as closely as possible without breaking the new rules.


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      Re: Ofcom moves to ensure Sky and TalkTalk fibre can undercut BT Consumer

      Free Fibre with Sky Sports next summer?...not likely, tbh, but who knows? If 1000's of customers start to cancel their tel and bb to go to BT for free/discounted BT Sports with European football coverage then it might happen.
      Churn was definitely up for a bit in the early summer last year IMHO so big discounts were rolled out for a few months. They're now rolling back to much smaller discounts but if you want to stay with Sky on lots of the services then my bet would be late summer for the best offers this year too.

      What I'd like to see out of this is a decent Fibre Pro offer. The current price is too high when customers are comparing with 152Mbps on Virgin media or BT Infinity 2 which is cheaper and includes BT Sports. At least when a customer with 4-10Mbps internet is saying they want faster then the possibility of 80Mbps is better than saying the best we can do a discount on is 40Mbps, if you want 80Mbps then we cannot do any discounts! For gamers the superior upload on Pro could help compared to Virgin, unless as rumoured they bring out a higher tier 200/300Mbps in the next couple of months.
      Last edited by bubblegun; 18-01-15 at 02:02 AM.
      Please note the views and recommendations in my posts are my own and in no way reflect the views of Sky

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      Re: Ofcom moves to ensure Sky and TalkTalk fibre can undercut BT Consumer

      Again there is a lot happening behind the scenes with all the big providers at the moment.

      IMHO Sky's Fibre products compare less favourably with many others on price and router.

      As a product that works with friendly support, Sky is fine. Reliability is good overall. Lack of throttling is great.

      However most people don't look at support & throttling. Reliability is going t be much the same with everyone else too since all but Virgin use the same infrastructure. Sure the backhaul & servers differ but people in general don't care about that. We all assume that they are the same. Of course they differ but the detailed knowldge to evaluate them isn't available.

      Basically Sky are losing on price and extras. Sky Sports is only going to be great if you watch the content, mostly football. However you do get access to BT's IPTV service.

      Sky must change something and change it for the better soon if they intend to stay in the Broadband game. Their York and Basingstoke projects are not going to help the rest of the UK.

      PlusNet Fibre since Jan 2021
      Previously Sky Fibre & Sky BB since 2010.

     

     

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