In December 2022, the poetically named ‘Equinox 2’ wholesale full-fibre pricing offer provided by BT Openreach came under the gaze of UK telecoms regulator Ofcom.
Ofcom considered whether in driving down the price of full-fibre network access for internet service providers such as Sky and TalkTalk, Openreach was abusing its dominant position in the full-fibre marketplace.
Ofcom eventually dropped its investigation a few months later, stating: “Our provisional view is that we should not intervene to prevent Openreach from introducing Equinox 2.
“We consider the offer is not anti-competitive and is consistent with the rules we consulted on before introducing them under our market review in 2021.”
This decision received vindication today with Sky striking a major deal with alternative network rival CityFibre.
Sky expects its full-fibre broadband offering to be available through CityFibre's network from next year.
Longer term, this will include over 1.3 million homes CityFibre’s participation in the Government’s Project Gigabit Programme.
This does not mean Sky is ditching Openreach as a network provider; with a network footprint of 3.8 million homes, CityFibre is still a small fish compared to Openreach’s 15 million-strong full fibre footprint.
But the deal goes to show that BT Openreach’s dominant position cannot be taken for granted.
This raises the question of whether BT intends to push the boundaries of its wholesale full-fibre discounting scheme even further.
It is of course far too early to tell, but it seems likely that when it comes to negotiating with Ofcom once again, BT can use today’s Sky-CityFibre deal as a powerful bargaining chip.
BT has a while to prime its Equinox 3 negotiation strategy- it has pledged not to change its discount scheme until at least 31 March, 2026.
Until then, perhaps we might see more surprise deals being inked between Britain’s ISPs and the growing cohort of altnets.
A spokesperson for BT told Proactive: "I can’t comment specifically, but Ofcom has said that Openreach is allowed to compete and make pricing offers, so we reserve the right to consider further special offers in the future."
On the Sky-CityFibre deal, an Openreach spokesperson said: “This was expected as the UK’s fibre broadband market becomes ever more competitive. But we’re building fibre faster, more efficiently and providing better customer experience than anyone.
"With more than 15 million premises reached, and our ambition of up to 30 million by the end of the decade well in sight, we’re very confident that Openreach will continue to be the UK’s fibre partner of choice.”