BT’s Openreach looking at lowering cost of wholesale broadband

BT networking division Openreach is looking to reduce its broadband prices to attract new customers and lock in big wholesale clients like Vodafone, TalkTalk, and Sky as rivals lay full-fiber cables across the UK. The incumbent network operator, part of BT Group, has met some of its biggest corporate customers to suggest a number of changes to its pricing structure that would make its offer more attractive and help them move customers from copper to full fiber. Openreach makes money by wholesaling its broadband to internet service providers, including its parent group BT. For many years its only rival was Virgin, which also had its own network, but more recently almost a hundred smaller alternative networks — or “altnets” — have emerged with the goal of laying fiber as quickly as possible to attract customers frustrated by their existing service. “BT is facing the biggest competitive threat in its history, so a plan to once again cut wholesale prices may well be a sign of desperation from the incumbent to flex its fiber muscles and lock in internet service providers looking elsewhere,” said a competitor who has seen the outline of the new pricing proposals. The latest proposed pricing changes include reducing the amount Openreach charges companies like Sky on an ongoing basis for use of the network, decreasing the share of revenue per customer that goes to Openreach, and cutting the amount it charges for migrating customers from copper lines to fiber lines by between £30 ($34.46) and £37 ($42.51).