Ofcom has directed Openreach to withdraw its Incremental New to Openreach Customer Offer, a wholesale full-fibre discount of up to £9.50 per customer per month for as long as 30 months, as other notified pricing packages took effect from 1 October.
The ruling, finalised in the regulator’s 28 September statement, is the first time Ofcom has blocked a commercial offer from the BT-owned network since it gained powers to scrutinise targeted promotions. Cityfibre, Virgin Media O2 altnets and rural fibre builders argued the deal would have undercut them on the very households they need to win to repay build costs.
What still went live on 1 October
Ofcom cleared several other Openreach notifications, including a £50 one-off incentive for new full-fibre customers in Virgin Media O2 areas, Ethernet net-demand pricing and an extension to Equinox 550Mb rental incentives through March 2027. Those packages were judged less likely to prevent a reasonably efficient altnet from recovering its costs.
Wholesale shifts do not change retail bills immediately — ISPs still set consumer prices — but they alter the margin available to challengers such as TalkTalk, Sky and smaller regional networks buying Openreach lines.
Why Ofcom intervened
In its decision, Ofcom said Openreach’s blocked offer was not fair and reasonable because targeted discounts on new customers could force altnets to match prices they cannot afford while building parallel networks. Openreach’s significant market power lets it subsidise only the customers rivals covet, leaving other tariffs untouched, the regulator argued.
Openreach had notified the package in June under SMP Condition 8.6, triggering a summer consultation. Industry respondents split: incumbents warned blocking discounts could slow fibre take-up, while altnets said predatory wholesale pricing would shrink long-term competition.
What it means at home
Households hunting gigabit deals this autumn will still see aggressive retail promotions, but they will not benefit from the withdrawn wholesale subsidy. Ofcom’s message is that short-term price cuts must not come at the expense of sustainable network competition.
Dame Melanie Dawes, Ofcom’s chief executive, has separately promised close oversight of BT’s TalkTalk migration programme, another flashpoint for digital infrastructure. Together, the October pricing calendar and the blocked discount show regulators trying to keep full-fibre roll-out competitive even as take-up lags in parts of the country.
Altnet reactions
Cityfibre said in consultation responses that targeted wholesale cuts would have forced it to match prices on customers it spent billions to reach. Virgin Media O2, which competes with Openreach in some streets and buys from it in others, stayed quieter publicly but backed regulatory review in filings. Smaller altnets in Wales and Scotland argued even cleared offers should be monitored quarterly because build costs vary sharply by topology.
Openreach has not said whether it will refile a narrower promotion, but industry briefings suggest product teams are studying which elements Ofcom accepted. A £50 one-off payment in cable-overbuild areas is easier to model than recurring discounts tied to customer tenure.
Retail pricing remains competitive
Consumers comparing deals on comparison sites may still see aggressive introductory rates from TalkTalk, Sky and Vodafone, because those prices reflect retail margin choices as much as wholesale inputs. Ofcom’s ruling is about long-run infrastructure competition, not tomorrow’s bill.