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Copper broadband phaseout will leave UK customers with higher bills and less choice, says comparison site
Friday, 26 February 2021 03:46

Comparison site Compare Fibre reckons consumer choice will halve and prices will "as much as double" in areas where Openreach is to stop selling copper services.

The bold claims came as Openreach gradually phases out sales of copper-based broadband and phone products ahead of a nationwide stop-sell order in 2023, and a forecasted withdrawal of the copper network by 2025.

"On the face of it, it's excellent news," said Nathan Hill-Haimes, co-founder of Compare Fibre. "The UK's fibre infrastructure will replace the archaic copper technology many of us use to access the internet. The government is setting aside £5bn to connect the remaining hardest to reach areas. But there's a cost of this light-speed, ultrafast revolution."

Hill-Haimes cited Flockton, near Wakefield in West Yorkshire, as a potential loser, with copper services set to be discontinued later this year.

"A new broadband consumer in Flockton arriving after June 2021 will be paying (at today's prices) anywhere from 84-110 per cent more for their broadband than an existing resident, with a reduced number of providers from which to choose. The net effect of the 'stop sell' reduces consumer choice and higher prices."

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But do punters still want copper?

Copper-based products have tended to be cheaper than their full-fibre alternatives. John Lewis charges £19 for a nationwide 10Mbps ADSL subscription, with no setup costs and unlimited usage. By comparison, BT's basic full-fibre package costs £29.99 per month, with a £10 setup fee. To boot, it locks the user into a 24-month contract, rather than 12 months with John Lewis.

But curiously omitted from Compare Fibre's claims was the fact that legacy all-copper subscriptions have shrunk year-on-year over the past eight years, while adoption of FTTP has accelerated. According to TalkTalk's 2020 annual report [PDF] [PDF], nearly 78 per cent of its consumer base were using a fibre connection (across FTTP and FTTC). Moreover, 85 per cent of new customers opted for fibre, and the majority bought high-speed (80Mbps+) products.

Although BT has not offered the same level of detail as TalkTalk when it comes to its subscriber base, it seems to be a similar story, with double-digit growth for fibre products in the nine months leading to 31 December 2020. It attributed this, in part, to declines in the number of users clinging to legacy copper-based connections.

There was also healthy growth in high-speed subscriber numbers from Virgin Media, with demand driven by pandemic-related usage, like home-schooling and remote working. Things that are more tricky to do when languishing on a legacy ADSL connection, or a basic superfast package. And although Virgin has not had Openreach's legacy copper network to contend with, these figures are indicative of a widespread willingness to pay more for faster connections.

The trend could be attributed to a fluke of the pandemic, but Ofcom's own figures have shown a steady decline in ADSL subscriptions, which halved in the years between 2013 and 2019. Full-fibre subscriptions, although a small part of the market, increased by almost 53 per cent between 2018 and 2019. When Ofcom releases its 2021 figures in April, that trend may not merely continue, but accelerate.

Hill-Haimes noted that customers wishing to move superfast (FTTC) services after the copper stop-sell deadline will be forced to upgrade to FTTP, although this doesn't necessarily mean connections would cost more. A comparison between Salisbury (where Openreach stopped selling copper services in December 2020) and Flockton showed prices roughly in line with each other, especially when comparing speeds.

We've asked Ofcom and Openreach for comment. While Compare Fibre is correct in noting the withdrawal of FTTC and ADSL products will reduce consumer choice, this is not the catastrophe it sounds. As demonstrated by Ofcom's own data, there's little demand for cheap, slow internet. It's something people are, by and large, willing to pay extra for. This was true even before the pandemic forced us to rely on the internet like never before.

Meanwhile, there's no evidence of soaring prices in the areas where Ofcom's copper stop-sell has occurred – although it's still early days. Opeanreach is expected to stop copper sales in more than 200 locations this year. ®

Source: https://bit.ly/2PelgFC