Ofcom has instructed Openreach to withdraw its 'Incremental New to Openreach' offer, ruling that a wholesale discount worth up to £9.50 per customer per month for as long as 30 months was not fair and reasonable and could damage competition between UK broadband networks.

The decision, now finalised, follows a consultation Ofcom opened in July on a batch of planned commercial offers from Openreach, the wholesale arm of BT that operates the UK's largest fixed network. Because of its significant market presence, Openreach must give the regulator and the wider industry advance notice of certain categories of commercial offers before launching them — a safeguard designed to protect rival networks that depend on, or compete against, its infrastructure.

The rejected offer targeted full-fibre take-up. It would have rewarded internet service providers with a monthly discount for each new FTTP customer they migrated onto the Openreach network. Ofcom concluded that a discount on that scale could make it difficult for competing network operators to match the terms while still covering their own costs.

The regulator also flagged a second problem: the incentive applied only to new customers. That structure, it said, could make it harder for alternative network operators — the so-called alt-nets building rival full-fibre infrastructure across the UK — to build up their customer bases in a market where Openreach already holds the largest share of lines.

Openreach accepts the ruling but defends the offer

James Lowther, Managing Director for Commercial at Openreach, said the outcome matched the regulator's earlier consultation position. "Ofcom's decision not to approve our incremental FTTP new to Openreach offer is in line with their consultation position. We put this offer forward in good faith to help our customers compete and deliver better value for households," he said.

"While we continue to believe the offer would have benefited customers and competition, we'll review the decision carefully and continue to engage constructively with Ofcom and our customers."

Lowther confirmed that Openreach's remaining plans are unaffected. "We'll launch our other offers and continue to compete fairly, including our FTTP offer within the VMO2 footprint and an ethernet offer for businesses. We'll continue to invest in the UK's digital infrastructure, bringing growth in every postcode and helping our customers deliver for homes and businesses," he said.

Alt-nets welcome decision, push for more

Nexfibre, the wholesale fibre operator backed by Sky, which competes directly with Openreach in the full-fibre market, welcomed the intervention but argued it did not go far enough.

"Ofcom's decision today is a positive step towards protecting competition in the UK fibre market, although we would have liked to see the regulator go further," a Nexfibre spokesperson said. "Openreach's tactic of drip-feeding price changes via special offers needs to stop at a time when competition remains nascent. Ensuring alternative networks have the incentives to invest, grow and achieve scale will be critical to creating credible, sustainable competition."

Why the ruling matters

The case tests the boundaries of Openreach's pricing freedom as its full-fibre rollout matures and alt-nets compete for the same premises across much of the country. Ofcom's fairness and reasonableness obligations, inherited from the 2017 voluntary commitments that replaced formal functional separation remedies, require Openreach to offer equivalent terms to all providers and to avoid pricing that squeezes rivals out of the market before they reach scale.

For ISPs, the blocked offer means no discounted route to migrate new full-fibre customers onto the Openreach network, preserving a more level playing field on wholesale pricing — at least until Openreach revisits the structure. With Openreach reviewing the decision and pledging to launch its remaining offers, including FTTP pricing within the Virgin Media O2 footprint, the next round of wholesale pricing moves in the UK fibre market is likely to arrive within months.