UK Regulator Ofcom Warns Openreach Fibre Discount Scheme Harms Competition

UK communications regulator Ofcom has warned that BT’s Openreach could be forced to pull a discount scheme aimed at new fibre broadband customers, stating the arrangement is not fair and reasonable and threatens market competition.

At issue is the 'New To Openreach' scheme, which offers discounts of up to £9.50 for a duration of up to 30 months. Ofcom said the initiative involves aggressive discounted pricing targeted at new customers—a key segment that rival fibre broadband providers rely upon to grow their customer bases.

According to the regulator, matching these discounts could prevent competing firms from recovering their operational costs, particularly given the low price points they already offer across their broader customer bases. Ofcom cautioned that without sustainable competition in the market, prices could eventually rise, noting that firms competing to deliver affordable and improving broadband services help support wider economic growth.

Openreach defended its position, arguing that in a competitive market, regulation should not protect business models that are less efficient, and expressed disagreement with Ofcom's analysis. The company maintained that it must be allowed to compete fairly.

However, Ofcom stressed that while Openreach is entitled to compete, it cannot leverage its significant market power to drive competing networks out of the industry. The regulator stated that its final decisions on planned offers will prioritize promoting sustainable competition, which it views as fundamental to keeping long-term prices low and expanding advanced broadband access across the UK.