Ofcom has directed Openreach to withdraw a proposed wholesale full-fibre offer designed to reward providers for bringing new customers onto its network. The decision stops the Incremental New to Openreach Customer Offer before its planned launch and leaves Openreach free to proceed with its other notified full-fibre and Ethernet offers.
A targeted wholesale incentive
The blocked proposal was not a direct reduction on a household’s broadband bill. It was a wholesale incentive for internet service providers, aimed at customer volumes above each provider’s normal sign-up baseline. For qualifying new full-fibre customers who were not already using the Openreach network, the package would have combined a £35 connection rebate with a monthly rental rebate of up to £9.50.
The length of the monthly rebate was linked to performance above that baseline. It could have lasted for 18, 24 or 30 months, depending on the scale of qualifying customer gains. The offer had been scheduled to start on 1 October.
That structure matters because it concentrated the largest benefit on the customers that competing networks are trying to win as they build their subscriber bases. The regulator’s final conclusion was that the charges under the offer were not fair and reasonable under the framework governing Openreach’s wholesale services.
Competition at the centre of the decision
Ofcom’s assessment was rooted in the distinction between short-term price competition and competition that can be sustained by more than one network. Its concern was that a reasonably efficient rival could be left with margins too thin to recover its costs if it tried to match a discount available only for targeted new connections.
Openreach has significant market power in this part of the market, which brings additional obligations when it introduces certain commercial offers. The final direction does not prevent the company from competing for customers. Instead, it limits one targeted pricing mechanism after the regulator judged that it could weaken the conditions needed for rival fibre networks to grow.
There is still a substantial group of potential full-fibre customers to compete for. Around half of households able to access full-fibre services have yet to take one. For newer networks, gaining enough customers in areas where they have already invested is central to financing and operating their infrastructure. For consumers, the policy aim is to preserve a market in which network operators can continue to compete on price, service and coverage over the longer term.
Other offers can continue
The intervention is deliberately limited. Openreach notified a group of commercial offers covering Fibre to the Premises and Ethernet wholesale services during June and July. Following its review, Ofcom said it would not intervene in the other notified offers because they did not raise the same competition concerns.
That means the ruling should not be read as a blanket prohibition on wholesale discounts, nor as a decision to halt Openreach’s wider fibre programme. It is a direction concerning one specific new-customer offer and the terms on which it was proposed. Other commercial measures notified in the same process may go ahead.
The difference is important for customers trying to understand the immediate effect. The decision does not set a new retail broadband tariff, require people to change provider or alter an existing contract. Its impact is at the wholesale level, where the prices and incentives available to service providers can influence which networks they use and how vigorously they can compete for future connections.
Why the ruling is significant
The decision marks an unusually direct intervention in a commercial offer from the country’s largest fixed network operator. It also provides a clearer indication of how Ofcom will apply the Telecoms Access Review framework while the full-fibre market is still developing.
Openreach has indicated that it will review the decision while continuing with its other commercial offers. The next test will be how providers and rival networks respond without the proposed acquisition incentive. The outcome will be measured less by a single promotion than by whether consumers retain a meaningful choice of networks as full-fibre take-up expands.
