Ofcom's Equinox 2 discount offer draws mixed response

Ofcom's approval of Openreach's Equinox 2 pricing offer prompted mixed responses from industry. The regulator's green lighting of the scheme in May followed a period of industry consultation to ascertain whether Equinox 2 is anti-competitive, and according to some stakeholders Ofcom got it right, others say it made the wrong decision.

GUY MILLER
MS3

There is little point in our industry crying over spilt milk as the decision is made. What’s important is how altnets continue to play their role in the supply chain with faster speeds, better commercials, better customer service and a better understanding of their local markets. The faster switch to full fibre is extremely important, whether the wholesale saving gets passed on to end customers is a different matter which so far has not been evidenced by the larger ISPs. Ofcom is between a rock and a hard place as you cannot favour either BT or the altnets without the other side crying foul. Its job now is to ensure that Openreach and BT Group do not take advantage unjustly of their monopoly position.

OLIVER HELM
FULLFIBRE

There are concerns over continued iterations of the offer going forward. If CPs see that there is more margin in lobbying Openreach for further price reductions, than from working with altnets, competition in the market becomes more theoretical than actual. The UK Government made infrastructure-level competition a pillar of the Strategic Priorities laid out to Ofcom because these competitive tensions benefit consumers. There’s some assurance that Openreach won’t move prices again until 2026, but three years isn’t long when you look at the market through an infrastructure-level lens. Openreach is cutting prices, but BT is sticking inflation-linked price hikes for consumers. Altnet’s have proven that we know how to compete by building leaner more agile businesses, and what Ofcom must decide is how much of the UK should benefit from that.

PETE TOMLINSON
WINDSOR TELECOM

Equinox 2 will help drive the adoption of full fibre broadband which is important to underpin the cloud technologies that are already enabling better, smarter and faster ways of working for everyone. The key aspect of the offer is that retail providers must order Openreach’s full fibre products over its legacy copper solutions so there are no anti-competitive practices against the altnets. If they had to prioritise Openreach’s full fibre over other altnets’ services, this would be a very different conversation. So yes, Ofcom got this one right. My advice for altnets who want to grow in this new phase of adoption is that they need to focus on being easy for resellers to do business with. This decision should be seen through a wider lens that considers other recent measures by Ofcom, such as Passive Infrastructure Access which has significantly reduced the cost of competitors accessing Openreach’s ducts as poles.

RICHARD TANG
ZEN INTERNET

Ofcom’s decision to allow Openreach to introduce Equinox 2 pricing will make full fibre broadband more affordable and accessible for millions of UK households. Far from creating a barrier to altnets, this decision will help to stimulate demand for faster and more reliable connections and support ongoing investment in gigabit-capable networks. Ofcom made the right call in letting free market competition operate as it should, rather than intervening unnecessarily. We support Ofcom’s commitment to ensuring a level playing field for all fibre investors.

JON DANIEL
GLIDE UK

For BT to encourage users onto fibre services, it needs prices on a par with copper. These lower prices create a barrier for altnets which cannot afford to offer this level of pricing. BT will not suffer from this due to its existing revenue base and may become the last man standing. Even consolidation of the altnets may not prevent this. This is likely to be very bad for consumers since there will be little incentive for innovation or competition to keep prices low. Longer term foreign investors may well be put off by what they might see as government passivity in supporting the interests of British incumbents against them. Ofcom clearly wishes BT to succeed in maintaining its position as the largest access player in the UK and is happy to look the other way should there be any suggestion that this is not in consumers’ long-term interests.

SOHIN RAITHATHA
REDSQUID

The Equinox 2 offer is likely to speed up the UK’s digital transformation by accelerating the rollout of full fibre and encouraging consumers to make the switch sooner. The market is already highly competitive, but we are seeing altnets coming in just as price competitive as Openreach, even with the new discounted prices. The rollout of fibre across the country is a billion-pound investment for the networks, and this will help mass volume uptake of full fibre services. With Ofcom approving Equinox 2, it is enhancing competition among the networks by putting businesses and consumers first who now will be able to benefit from greater choice, innovation and value.

TOM O’HAGAN
TALKTALK WHOLESALE SERVICES

Equinox 2 will benefit consumers, competition and the ongoing rollout of full fibre. This decision will mean that full fibre remains affordable, while securing rollout investment and maintaining thriving competition. Far from threatening competition, Openreach prices remain significantly above those of efficient altnets, and we have seen from the original Equinox pricing that more FTTP is sold more generally, which benefits all fibre builders. TalkTalk is connecting consumers and businesses to full fibre through both Openreach and alternative fibre builders.

SIMON WILLMOTT
NEOS NETWORKS

The introduction of Equinox 2 is going to choke competition and Ofcom is naive if it thinks it does not create a barrier to using altnets. The new offer means greater reliance on Openreach, locking in ISP customers to the incumbent. The commoditisation of connectivity has created a race to the bottom which will be accelerated by this change. It does mean lower prices for Openreach customers, but it does not support the intentions of altnets which have been faster to build fibre for underserved communities. The reduced pricing may also stifle further investments by altnets forcing them to lower costs where they have already built to compete against BT, at the same time reducing ROI and limiting their ability to invest in further network growth. The additional fees of Equinox 2 create more challenges for the altnets and further slow the effectiveness of plans to meet Gigabit Britain targets.

JEREMY CHELOT
NETOMNIA

Netomnia competes at the wholesale level and this Equinox 2 pricing offer will make it more difficult to have infrastructure competition. Openreach stated, 'this is good news for customers as it means lower prices and long-term certainty, encouraging the switch to faster, more reliable broadband connections'. I would agree if the statement read, 'this is good news for retailers like BT' - but with the price hike of 14-plus per cent it is still more expensive for consumers. I would love to have Openreach increase its pricing, but it would not be fair for consumers. I think the decision from Ofcom was good and now we have certainty for the foreseeable future.