Ofcom blocks Openreach’s £9.50 fibre discount in first-ever intervention

It is the first time the UK regulator has blocked a commercial offer from BT’s network arm, confirming the position it first proposed in July.

Under the Incremental New to Openreach Customer Offer, internet service providers (ISPs) would have received a £35 connection rebate and a £9.50 monthly rental rebate for new full-fibre customers not previously on Openreach’s network. The rebates applied only to volumes above a baseline set for each ISP. The monthly rebate would have run for 18, 24 or 30 months, depending on how far the ISP exceeded that baseline. The offer was due to launch on 1 October.

In its final decision, published on 28 September, Ofcom found the charges were not fair and reasonable because they could leave margins too thin for a reasonably efficient rival to recover its costs. The regulator said Openreach’s significant market power left it uniquely placed to make such a targeted offer, cutting prices for customers that altnets rely on to grow while leaving prices for other customers unchanged.

Timing also weighed on the decision. Around half of UK households with access to full fibre have yet to sign up, and Ofcom said an offer aimed only at new customers could stymie altnets’ ability to scale.

When it first proposed the block, Ofcom’s group director for infrastructure and connectivity, Natalie Black, said Openreach “must be able to compete” but could not use its market power “to drive other networks out of the market”.

A limited intervention

The ruling covers one offer. Ofcom cleared the other offers Openreach has notified since June, including a Frontbook ARPU Share Offer and Box Swap Offer already live since 1 July, an Ethernet Net Demand Offer, and an expansion of the area covered by its existing Equinox discounts.

It also approved a version of the new-customer discount targeted at Virgin Media O2 (VMO2) areas. Ofcom said the discount was small enough that the risk of harm to long-term competition was not sufficiently plausible, and allowed it “on this occasion”. The regulator added that it had taken the potential cumulative impact of Openreach’s overlapping offers into account.

Openreach said the decision was “in line with their consultation position” and that it would review it carefully. James Lowther, managing director for commercial, said the company had put the offer forward “in good faith”. He added that Openreach would launch its other offers, “including our FTTP offer within the VMO2 footprint and an ethernet offer for businesses”.

A break with precedent

The decision marks a shift in how Ofcom treats Openreach’s wholesale pricing. The regulator previously allowed the Equinox and Equinox 2 discount schemes to proceed despite altnet objections that the discounts could not be matched. In October 2025, it also declined to intervene over an Openreach offer on proactive fibre upgrades.

Openreach remains the UK’s largest full-fibre network, with a footprint of 23 million premises according to BT’s results for the year to 31 March 2026.

Altnets want more

nexfibre, the wholesale fibre joint venture backed by InfraVia, Liberty Global and Telefónica, called the decision “a positive step” but said it “would have liked to see the regulator go further”. The company said Openreach’s practice of “drip-feeding price changes via special offers” needed to stop while competition remained nascent.

The consolidation question

nexfibre used its response to make the case for its proposed £2 billion acquisition of Substantial Group, the owner of Netomnia, YouFibre and Brsk. It said the deal would create “a stronger challenger” able to drive competition and investment.

The combination would give nexfibre a full-fibre footprint of around 8 million premises by the end of 2027, including about 2.1 million VMO2 premises upgraded to fibre. After an initial review in April, the Competition and Markets Authority (CMA) referred the deal to an in-depth Phase 2 investigation on 1 July under its fast-track procedure, at the parties’ request.

The deal has divided the altnet sector. CityFibre CEO Simon Holden has warned of an 80% network overlap between the parties and the risk of re-establishing a BT and VMO2 duopoly.

Ofcom’s ruling sets a limit on how aggressively Openreach can price to win the remaining full-fibre customers. The CMA’s verdict on nexfibre and Netomnia will decide what scale of challenger it faces for them.

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• CMA opens initial review of nexfibre’s £2bn Netomnia acquisition
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