Ofcom's decision on Openreach’s ‘Equinox 2’ pricing offer

24 May 2023 11:29 AM

Ofcom has today published its decision not to prevent Openreach from introducing its new pricing offer for full-fibre broadband, known as ‘Equinox 2’.

Under our rules, Openreach must notify us of certain offers before they come into effect. This is to allow us to assess them before they are introduced, and where necessary to allow us to intervene to prevent them from being introduced.

On 14 December 2022, Openreach notified us of a new pricing offer for its full-fibre services(Equinox 2). This offer gives lower prices to retail providers – such as BT, Sky, TalkTalk and Vodafone – if they agree to use mainly Openreach’s full-fibre products for new orders instead of its legacy copper products.

Having carefully assessed the range of evidence available to us – including responses to our public consultation – we have decided not to prevent Equinox 2 from being introduced.

In reaching our view, we have considered the impact on:

• Citizens and consumers: Our conclusion is that Equinox 2 is consistent with promoting investment in gigabit-capable networks by Openreach and other operators and promoting network-based competition, ultimately delivering better consumer outcomes.
• Alternative networks: As a result of Equinox 2, ‘altnets’ are likely to face stronger competition from Openreach. However, we conclude that the conditional terms in the offer do not create a potential barrier to using altnets. Our conclusion is therefore that Equinox 2 is consistent with network-based competition.
• Internet service providers (ISPs): We consider that ISPs are likely to benefit from network-based competition. As explained above, we conclude that ISPs will continue to be free to use altnets where they wish to do so.
• Openreach: We consider that not preventing Openreach from introducing Equinox 2 allows it to engage in network-based competition, without compromising our objective of promoting investment in gigabit-capable networks.

Our overriding objective is to bring better broadband to people across the UK, by promoting competitive investment in high-speed networks and making sure there’s a level playing field for all companies.

With this in mind, and based on the evidence available to us, we don’t consider Openreach’s new pricing discounts to be anti-competitive.

Ofcom spokesperson

We have also considered the level of prices under Equinox 2, and concerns among some market participants about Openreach’s practice of discussing and developing discounts with retail providers. Having carefully assessed information from providers and altnets, we do not have concerns that warrant further investigation at this time.

Openreach has informed us that – in response to concerns raised – it plans to make certain commitments regarding its future conduct, including not having any current plans to change its Equinox 2 rental prices and no intention to initiate further changes until at least 31 March 2026. This may provide further clarity for altnets and their investors. However, we have not relied on these commitments in reaching our conclusions.