REG - OFCOM - Ofcom decision on ‘Equinox 2’ pricing offer

VodafoneAnnouncement

24/05/2023 08:15

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RNS Number : 3555A  Office of Communications  24 May 2023

24 May 2023

 

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

 

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.

 

An Ofcom spokesperson said: "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."

 

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.

 

Please visit the Ofcom website for further details:

https://www.ofcom.org.uk/consultations-and-statements/category-3/openreach-proposed-fttp-offer-starting-1-april-2023

 

END

 

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