Openreach cuts costs by 75% to attract builders to fibre diet

Openreach will be slashing the cost of installing fibre wires in new residential developments of less than 30 plots, as it looks to tempt housing developers onto a fibre diet.

Although it might seem remarkable, house builders are not currently mandated by law to install fibre broadband infrastructure on new premises. Considering the aggressive rhetoric being spouted by the UK Government when it comes to laying future-proofed foundations for the digital economy, it does beggar belief the opportunity to cut corners and ignore fibre is still available to these developers.

The ‘Housing Crisis’ in the UK is one which does attract headlines. The severity of this ‘crisis’ does of course depend on who you are talking to, though in certain regions it is undeniable there is a shortage of properties. All you have to look at the price of a two-bedroom flat in London to understand the pickle some youngsters might be in.

This does present an opportunity for the housing developers to make a profit. During the last quarter, the Office for National Statistics estimated 42,870 new homes were completed, though not all took fibre as default. Around 88% of plots on new builds contracting with Openreach elect fibre, though this number increases to almost 100% for plots of over 30 premises.

However, there are still numerous developers which are not taking fibre as a default position. Openreach suggests 124,000 of the new homes constructed in the UK in 2018 still lack access to ‘superfast’ broadband speeds of 30 Mbps or more. The situation is gradually improving, though there still much work to do.

With this in mind, Openreach is looking to increase the attractiveness of installing fibre connectivity through cutting costs by up-to 75% for multi-dwelling housing developments up to 29 properties.

“Our existing offer already provides huge benefits to both buyers and builders alike, but we wanted to go further and make sure everybody moving into a new build property can enjoy the advantages of Fibre-to-the-Premises broadband,” said Kim Mears, MD of Strategic Infrastructure Development.

“Our new offer provides a low-cost option to housebuilders and we hope it will help encourage the adoption of this future-proof technology across smaller developments so that no-one’s left behind.”

Although internet speeds might seem like an after-thought to some, research from LSE and Imperial College Business School suggests home-owners in London are willing to pay up to 8% above the market value properties in areas offering very fast internet speeds. The benefits of fibre connectivity for housing developers is key, though there are still some who are demonstrating a preference for copper, presenting a problem to the likes of Openreach and Virgin Media; it would be far simpler to connect properties while they are in the construction stages.

The Future Telecoms Infrastructure Review (FTIR) concluded connectivity in new builds was not anywhere near the standard it should be, while the FTTH Council Europe estimates also paint a dreary picture. Fibre penetration is as low as 1.5% across the UK, woefully short of other nations such as Latvia (46.9% penetration), Sweden (43.6%) or Spain (43.6%). Even the lethargic Germany manages to beat the UK with 2.3%.

Moving forward, the Department of Digital, Culture, Media and Sport is set to publish its opinion from a recent consultation into the matter, with the intention of making it mandatory for developers to install gigabit-capable connections to all new build developments in the future. This is a step in the right direction, though it does surprise us it has taken until 2019 for such rules to be considered.

The consultation should result in a change to the rules, though whether this goes as far as some would want remains to be seen. It would also be a fair assumption that these new rules would not be implemented immediately.

Openreach might have to use the financial carrot for a bit longer while the slow-moving cogs of government click into place.

Vodafone challenges new Ofcom rules on leased line rates

Vodafone has lodged a complaint with the Competition Appeal Tribunal, challenging new rules which it believes will give Openreach too much opportunity to abuse customers.

Following the latest Business Connectivity Market Review rules published in June, Ofcom granted Openreach greater freedoms to charge customers more for leased lines. These leased lines underpin home broadband, cloud hosting and 5G, as well as services offered directly to the citizen, such as banking, healthcare, and local and central government online services.

“Ofcom has now changed its approach and is regulating based on what it hopes will happen in the future, rather than based on the evidence of how the market works now,” Vodafone said in a press release.

The relaxation of rules has been based on various investigations over the last few years, though Vodafone has found issue with a few points.

Firstly, the Business Connectivity Market Review suggests Openreach does not have significant market power in the London region. Vodafone disagrees with this, suggesting market share of between 60% and 70%, exceeding the levels defined as market domination by Europe.

Secondly, Vodafone disagrees about the removal of a cost-based price cap in favour of a flat rate price cap. The cost-based approach was much more fluid, moving with the real cost realised by Openreach. Vodafone suggests Openreach costs are only going down, therefore the wholesaler will benefit significantly from the change.

Finally, in some cities Ofcom expects competition to enter the fray, therefore pricing regulations have been loosened. From Vodafone’s perspective, the facts are simple; competition hasn’t yet entered the market, and the regulations should be kept in place until they actually do.

In some parts of the saga, Ofcom has perhaps acted slightly irresponsibly, though you always have to remember this is a PR assault from Vodafone. Weaponising the press, as Vodafone is trying to do here, is often accompanied by emotive language, exaggeration and quoted figures which push right to (or perhaps beyond) the edge of estimate ranges.

This is not to say they will not prove to be accurate, but it is always worth remembering the presence of massaging and manipulation.

Sky and Liberty Global allegedly in talks for full-fibre investment

Sky is reportedly in discussions with Liberty Global to add further fuel to the full-fibre machine which is engulfing the UK at an increasing rapid rate.

After a new company, Liberty Fibre Ltd, was registered with Companies House in the UK last week, parent company Liberty Global has allegedly entered talks with Sky UK to add additional investment to the scheme. According to the Financial Times, with Sky moving away from satellite connectivity for its content proposition, the team are seeking more attractive wholesales terms, with Virgin Media providing a potential alternative.

As it stands, Openreach is the incumbent wholesale partner to Sky. The wholesale giant has enjoyed market dominance in recent years, though numerous ‘alt-nets’ and alternative providers are creating a much more competitive market. Sky is supposedly in talks with Virgin Media to use its fibre network to deliver its broadband and OTT content service, and the creation of another wholesale fibre business would further lessen the dependence on Openreach in the rural locations.

The new company, Liberty Fibre Ltd, will aim to deploy full-fibre networks in locations outside of the main urban areas, the primary focus for the vast majority of network owners. Virgin Media will become the anchor tenant of the network, though should the rumoured discussions continue as planned, Sky would become an investor in the scheme and a second customer.

For Liberty Global, attracting Sky as a customer would be a significant win.

Although it does not own any of its own network assets (fixed or mobile), Sky is one of the most successful broadband providers in the UK. Although Sky has stopped reporting total subscription numbers, most estimates put the total number of broadband customers between 6.2 million and 6.5 million. This would give Sky roughly a 20% market share, even with Virgin Media and second behind BT. Currently, Sky has a fibre penetration of 38%.

The commitment of a heavyweight such as Sky would certainly lesson the financial burden of deploying a fibre network in areas where ROI projections are certainly less attractive than the dense urban environments. The attractiveness of Sky as a customer only increases when you consider the increasingly popular OTT video drive and aggressive fibre broadband marketing campaigns.

Although Sky is still primarily known for being the premium satellite pay-TV content provider in the UK, the OTT proposition, Now TV, is becoming increasingly popular. After being acquired by Comcast, Sky is likely to attract additional advertising revenues from the parent-company to further consolidate an attractive position in the UK.

After years of neglect, the full-fibre market in the UK is gathering momentum very quickly. It is still years behind other nations across the European continent, but the creation of a new fibre wholesale player will add more fuel to the blaze as glass sweeps across the isles. Liberty Fibre Ltd is an interesting idea, and if it can nail Sky as an investor and customer, its prospects will certainly head north.

Openreach adds another 35 cities to ‘fibre first’ programme

Openreach has announced a further 36 cities and towns which will be upgraded to Fibre-to-the-Premises (FTTP) broadband technology over the next 12 months.

As part of the ‘fibre first’ programme, 74 cities and large towns will undergo extensive upgrade programmes to ensure fibre is a realistic option for broadband services. It might have taken a while to get the UK on-board with the necessity for future-proofed broadband infrastructure, though momentum is gathering.

“We’re pressing ahead with our investment and Openreach engineers are now building in communities all over the country, keeping us on track to deliver against the bigger ambitions we set out in May,” said Clive Selley, MD of Openreach.

“The Government wants to see a nationwide full fibre network and we’re keen to lead the way in helping them achieve that. We know that if it’s going to happen, Openreach will need to be at the front doing the heavy lifting, so we’re working hard to build a commercially viable plan.”

With the continued aggressive push towards fibre broadband throughout the country, the prolonged battle between BT and Ofcom to retain control of Openreach makes much more sense. The telco fought bitterly to keep Openreach in the Group and now with enthusiasm for fibre higher than ever before it is was a justified battle, even if it did negatively impact the relationship with the regulator.

However, things are not all rosy for Openreach.

“One headwind to investment which affects all full fibre builders is business rates, and we’ve been encouraged by the Scottish Government’s move to extend rates relief north of the border,” Selley stated. “I’m convinced that prioritising investment in faster, more reliable and future proof broadband networks will prove to be a no-regrets decision for future generations.”

Complaints over regulation are of course not a new element of the telecommunications industry, though this is one which has been persistent. The industry has been promised changes, though few has been realised to date.

That said, the fibre revolution is catching. New Prime Minister Boris Johnson has pushed the issue onto the front pages with a ludicrous statement of 100% fibre penetration by 2025, though momentum was gathering prior to this. Last year, at Broadband World Forum in Berlin, one panel session discussed the improved appetite from investment funds and bodies to fuel the objective. The consumer demand has been proven, therefore the money men are starting to get interested.

What is worth noting is that Openreach is not the only firm who is on the charge with fibre expansion. Virgin Media’s Project Lightening is progressing successfully, while CityFibre is leading the charge for the ‘alt-nets’ to broaden the footprint in areas which might be deemed less commercially attractive.

With ambitious Government targets pushing the fibre rollout, it is encouraging to see promises entering into reality.

Ofcom looks to Salisbury for full-fibre experiment

Ofcom has introduced a new public consultation for rule changes which will remove regulatory commitments for Openreach to provide Superfast broadband services over copper wires.

As it stands, rules dictate Openreach has to provide customers access to Superfast broadband services. This is a step-change towards the ultimate goal of full-fibre broadband, with Openreach being forced to incrementally increase broadband services. Although this seems like a sensible approach to walk the path to full-fibre, the worry is offering two different services might disincentivise investment in full-fibre.

“Openreach has announced plans for a trial in Salisbury in which it aims to migrate customers to full fibre and then withdraw copper services there at the end of 2022,” Ofcom said in a statement. “Openreach has requested changes to existing regulation to facilitate the early stages of the Salisbury trial. This consultation sets out our proposals in relation to those changes.”

The proposal open to consultation here is the removal of obligations for Openreach to provide Superfast broadband services, speeds of more than 24 Mbps, over copper infrastructure when full-fibre alternatives are available. This is only when a customer requests an upgrade (when moving to a new house for example) not when a contract comes to an end. Customers will be able to stay on current contracts should they choose.

There are two questions which need to be answered here. Firstly, will removing Superfast options for the consumer help drive more investment into full-fibre infrastructure. And secondly, how will the consumers react to being forced into most-likely more expensive broadband tariffs? Openreach and telcos will have to take a careful approach to pricing if this trial is to prove successful.

The plan for Openreach is to withdraw copper services from various markets as exchanges are upgraded to full-fibre. As each exchange area is upgraded, copper services will be withdrawn, this is the strategy across the UK and is important to support the investment case for full-fibre. Ofcom has seemingly listened to this case and is looking to adapt rules to support this case, and hopefully, accelerate the migration across to full-fibre.

Should the consultation be positive, the new approach would be introduced in Salisbury during September 2020, with the long-term plan to retire all copper-based services in 2022 in the area.

Outside of this trial in Salisbury, Openreach has also recently announced a number of wholesale price reductions to encourage wholesale telco customer to encourage consumers to switch to fibre-based offers.

The new prices will come into effect on September 1, designed to make Openreach’s full fibre platform more accessible, with the same terms and conditions available to all telcos, without any obligation to commit to specific volumes.

Product Price reduction New price
Ultrafast (330 Mbps) 36% £24.28
Ultrafast (110 Mbps) 20% £17.28
Superfast (40 Mbps) 10% £14.28

Openreach also plan to launch 500 Mbps and 1 Gbps variants of its FTTP service during the next 12 months.

“We’re making great progress on our full fibre build programme and our discussions with customers about upgrading the country have been encouraging so far,” said Katie Milligan, Managing Director for Customer, Commercial and Propositions at Openreach.

“Naturally pricing is fundamental to that shift and we want to give our wholesale customers the confidence to invest at scale in their own full fibre products and services using our network. To do that, we’re offering them a greater incentive to switch their customers to a full fibre world, with more competitive pricing and a wider choice of products.”

The UK is pretty far behind the norm when it comes to fibre connectivity, though progress does seem to be accelerating in recent months. Should Ofcom be able to evolve the rulebook at the same time as Openreach taking a new mindset to pricing, the future does look a lot more positive.

BT faces another Ofcom probe

Ofcom has kicked-off an investigation to determine whether BT has complied with regulations concerning Excess Construction Charges (ECCs).

The ECCs are effectively charges for extra work BT-owned Openreach has to do to meet customer-specific network construction requirements. After the first £2,800 in excess cost, BT has been allowed to balance the spreadsheets with a standard connection charge for all relevant business connectivity services. BT has admitted it may not have applied the charge correctly and could be in-line for some wrist-slapping from the regulator.

“BT has provided Ofcom with information indicating that it may not have correctly applied the ECC exemption to a number of relevant business connectivity orders since the beginning of the ECC exemption regime,” an Ofcom statement reads.

“Having considered the information provided by BT, we have decided to open an investigation to examine whether there are reasonable grounds to believe that BT has failed to comply with its obligations under the following SMP conditions from 16 May 2014.”

Although some might suggest that a wholesaler such as Openreach should wear the cost of constructing its own assets, there are some exceptions. Occasionally, when delivering a new high-capacity leased line, for example, additional costs need to recouped by Openreach. This would be considered reasonable business practice, assuming Openreach plays fairly and by the rules.

Thanks to a prior Business Connectivity Market Review conducted by Ofcom, pricing controls have been placed on Openreach. Since 16 May 2014, the firm has been under these pricing restrictions in the pursuit of fairness.

As with most of these statements from Ofcom, there is little information for the moment. However, as BT informed the regulator of the potential over-charging, it would appear this is a case where judgment has already been reached. All Ofcom has to do now is understand the severity of the non-compliance and dish out a suitable penalty.

Industry says Government should focus on outcomes not specific tech

Being forward looking is an excellent quality to have in a national government, but when objectives are focused on technology not the desired outcome, it is a risky approach.

In this instance, it seems the UK Government can do nothing right. For years, the focus of the fixed industry was G.Fast not fibre, believing that the connectivity half-way house was a sensible strategy. There might have been adequate arguments made at the time, but with hindsight they do seem underwhelming.

Now the position is to drive towards a full-fibre, connected nation, with targets to connect every household with the future-proofed lines by 2033. However, some are now questioning whether this is an over-correction.

The issue seems to be that the UK Government is focused on technology, not delivering the desired outcome.

“We will cover the overwhelming majority of the UK with fibre, but there are also other technology developments which will contribute to a connected Britain,” said Clive Selley, CEO at Openreach. “These include FWA [Fixed Wireless Access] and low-orbit satellites, and we have mentioned balloons, we should be open-minded.”

Fibre should be the objective but doesn’t mean you have to deliver it to everyone and everywhere tomorrow. As Selly pointed out during his time on stage at the Connected Britain event, connecting the first 80% of premises to fibre is not an issue. It is expensive, it is time consuming, but its not complicated. The next 10% is going to be much more difficult, and the final 10% is where they haven’t worked it out yet.

Another interesting point is whether customers actually need fibre connectivity right now. In the desire to go end-to-end, you have to wonder whether fibre is needed for the last-mile. Long-term, of course it will be necessary, but it is about addressing the desire not the technology.

“In my opinion, government has been focusing too much on full-fibre,” said Three CEO Dave Dyson. “I would like the government to take a step back and understand what people actually need. Full-fibre is an answer, but it is not the only answer.”

Again, we would like to emphasise fibre should be the long-term aim. But, you have to ask what the actual objective of the UK Government is. In this case, it is to deliver faster connectivity to citizens across the entire country, irrelevant to the local environment.

Understanding fibre is the long-term objective, but the mid-term objective is accessibility to faster and more reliable connectivity is an outcome-focused strategy. This is where fixed-wireless access can play a role, as can low-orbit satellites and even balloons. The last mile can be delivered through a variety of options, as long as the foundation of the network is fibre, giving the option to extend in future years.

Unfortunately, it seems the UK is in a difficult position of its own making. In not embracing fibre earlier, it is behind the trends. A commitment to full-fibre might have been the right call 6-7 years ago, but the situation has changed. The current strategy does not necessarily present the UK with the best route towards the full-fibre nation; the plan should be evolved to consider context.

Here is pragmatic example, how many people actually need speeds north of 150 Mbps right now? Not many. Fibre is the best option for the long-term, but focusing on developing the foundations, delivering the experience which customers need and expect, while also creating a more sustainable approach to ROI should be the mid-term objective.

As Dyson pointed out, FWA offers the team a more readily available opportunity to drive revenue on a per-user basis. It allows them to react to customer demand as opposed to forecasts. However, for the proposition to work as promised fibre needs to be rolled at least to the cabinets everywhere.

This is a divisive topic. Some believe the telcos should bite the bullet and simply pay to get fibre everywhere. Holding them accountable is perfectly reasonable, but you have to also take into account the telcos have to make money as well.

When you consider context, financial demands and future-proofing the network, the equation is a very difficult one to balance. Fibre should be the long-term objective, but right now the demands are for faster broadband while also addressing the appetites of those in the rural communities. The other options to satisfy the connectivity demands of today should not be ignored, which is perhaps what is being done with the Government’s hardcore focus on full-fibre.

Strategies should be outcome focused not technology defined. This is perhaps the problem the UK is facing today.

Ofcom forces Openreach to open up again and reintroduces Dark Fibre

Ofcom has proposed new rules which will force Openreach to open up more of its network to other communications service providers.

Access to ducts and poles owned by Openreach has been a point of interest for Ofcom for some time, and now it appears the regulator is gathering momentum. As it stands, Openreach has to offer rivals access to its telegraph poles and underground ducts when providing services to consumers and SMEs, though the new rules will extend this ‘co-operation’ to enterprise scale and mobile backhaul connectivity services.

“The amount of internet data used by people in the UK is expanding by around half every year,” said Jonathan Oxley, Ofcom’s Competition Group Director. “So, we’ll need faster, more reliable connections for our homes, offices and mobile networks.

“Our measures are designed to support the UK’s digital future by providing investment certainty for continued competitive investment in fibre and 5G networks across the country.”

Although the likes of Virgin Media, TalkTalk and CityFibre are among the firms already using Openreach’s ducts and poles, to date the rules have been somewhat of a halfway measure. Improving access to Openreach infrastructure will improve the potential business case for all telecom services, offering greater prospects for competition.

The draft rules also bring the Dark Fibre discussion back into the fray.

In areas where BT faces no competition, Openreach would be required to give competitors physical access to its fibre-optic cables, at a price that reflects its costs. BT has always argued against the Dark Fibre suggestions from Ofcom, with the telco challenging rules brought forward by the regulator in the 2016 Business Connectivity Market Review.

BT’s legal challenge focused on the market definitions Ofcom used in the market review, with the Competition Appeal Tribunal (CAT) agreeing with the telco:

“The Competition Appeal Tribunal has found Ofcom to have erred in relation to various aspects of the decisions concerning market definition under appeal and required Ofcom to look again at some specific matters concerning market definition.”

This of course did not end the pursuit of Dark Fibre, but it did send Ofcom back to the drawing board. What is worth noting is that BT is not the only infrastructure owner to find issues with the obsession with lighting up Dark Fibre.

Following the decision from CAT, Ofcom promised to do better next time, much to the dismay of CityFibre.

“However, whilst the quashing of the BCMR is welcome, Ofcom’s response today appears to double down on its misguided approach to assessing the scope for competition whilst maintaining its flawed fixation with regulated dark fibre access,” said Mark Collins, Director Strategy & Policy at CityFibre.

“It’s pessimism about the prospects for real, infrastructure-based competition perversely restricts alternative providers’ ability to compete.”

The argument from the likes of CityFibre and BT is relatively simple. Dark Fibre removes the drive for infrastructure investment. Why would rivals want to spend money on fibre deployment when they could just force those who are making the plunge into working with them. It could potentially create a position where everyone is sitting, waiting on the starting line, waiting for a rival to twitch first.

That said, Vodafone does not feel the Dark Fibre rules go far enough.

“We support competition, but Ofcom’s proposals to grant access to dark fibre only on the fringes while loosening its price controls on BT Openreach will mean businesses and the public sector paying more to meet their connectivity needs,” said a Vodafone spokesperson.

“There is an alternative. Providing universal access to dark fibre now would give the UK the connectivity it needs, at a price everyone can afford. Sadly this is another opportunity Ofcom has missed to plug the full fibre hole in the UK.”

What is worth noting is that these rules are draft proposals for the moment. There is likely to be push-back from the likes of Openreach and CityFibre, and perhaps legal challenges in the mid-term. What rules are eventually introduced might look very different in a couple of months.

UPDATE: 24/05/19, 12.20pm: Openreach has released the following statement:

“Last year we delivered our best ever service performance, but we want to keep improving and we share Ofcom’s desire to improve service across the industry.

“Our ducts and poles have been open to other companies since 2011, and we recognise that unrestricted access is a natural next step, so we had volunteered to get on with that, ahead of Ofcom’s original schedule.

“We welcome the greater clarity around Dark Fibre and the timeframe needed to deliver a fully functional product to market.

“We’ll consider the range of proposals carefully, and we’ll continue to work with Ofcom on developing an environment that encourages greater investment.”

BT reports flat full year numbers but feels bullish about fibre

UK telecoms group BT revealed flat revenue growth on its full year 2018 report, but its new CEO said all the right things about investment.

Revenues were down a percent, but earnings per share were still up 6 percent. Of the business units only the biggest – consumer – showed any growth, with all the B2B units showing small declines. BT expects the 2019 financial year to deliver more of the same, because reasons. It said it has raised its capex guidance to £3.8 billion, but it ended up spending almost £4 billion in the 2018 financial year despite guiding £3.7 billion a year ago.

BT FY 2018 table

“BT delivered solid results for the year, in line with our guidance, with adjusted profit growth in Consumer and Global Services offset by declines in Enterprise and Openreach,” said new Chief Exec Philip Jansen.

“We need to invest to improve our customer propositions and competitiveness. We need to invest to stay ahead in our fixed, mobile and core networks, and we need to invest to overhaul our business to ensure that we are using the latest systems and technology to improve our efficiency and become more agile.

“Our aim is to deliver the best converged network and be the leader in fixed ultrafast and mobile 5G networks. We are increasingly confident in the environment for investment in the UK. We have already announced the first 16 UK cities for 5G investment.

“Today we are announcing an increased target to pass 4m premises with ultrafast FTTP technology by 2020/21, up from 3m, and an ambition to pass 15 million premises by the mid-2020s, up from 10 million, if the conditions are right, especially the regulatory and policy enablers.”

Those infrastructure ambitions are laudable, and were echoed by Openreach CEO Clive Selley, but don’t seem to tally with previous statements on the matter. A year ago Selley said “This year we’ll double our FTTP footprint and by 2020, we will have built it to 3 million homes across the UK. We want to reach 10m premises by the mid-2020s, and believe we can ultimately fully-fibre the majority of the UK under the right conditions.”

So the mid-2020s bit is fine but the 4m promise now has a revised deadline of April 2021, a year and a quarter later than the previous 3m promise. Now we might be missing something here but rather than increasing the target, all BT/Openreach seems to have done is insert another milestone a bit further down the line, which feels a bit deceptive.

“In cut throat market like the UK, there are few opportunities to grow,” said telecoms analyst Paolo Pescatore. “Moves to accelerate plans for its fibre broadband rollout, 5G and cross selling existing services can help increase the group’s bottom line but also require significant investment. The lack of any significant shift in strategy is unsurprising as it’s still early days for Philip Jansen.”

BT is hardly alone in hedging any investment pledge, however vague, with the caveat that it all depends on the regulatory environment. At least it has stopped openly begging for public money, for now. But the barely adjusted capex outlook implies even that pledge is trivial and Jansen might need to test his own investors’ patience with a more aggressive approach once he’s fully up to speed.

Virgin Media rumoured to be considering Openreach competitor

Virgin Media is sitting firmly in the middle of the rumour mill, with reports suggesting the team is considering opening-up its network as a wholesale connectivity competitor to Openreach.

For the majority of ISPs in the UK, there is very little option aside from working with Openreach. This position lead to a prolonged battle between Openreach parent company BT and the UK Government in an effort to separate the wholesale business from the group, and while the dust has settled, most feel the outcome is rather unsatisfactory. However, according to The Telegraph, Virgin Media is considering creating competition in this segment.

Should the move turn out to be true, it would be welcomed by many of the ISPs around the country. That said, Virgin Media and its parent company Liberty Media are keeping coy on the situation.

“We have the best broadband network in the UK and everyone knows it,” a spokesperson said. “We’re not surprised by this speculation but have no comment.”

While it is a slightly playful comment which will bring a smile to some faces, the firm has stopped short of out-rightly denying the report. This might lead some to believe there is an element of truth to the reports, others will simply suggest this is PR 101.

Although Openreach is still in an incredibly dominant position when it comes to the wholesale business, pockets of competition are emerging. CityFibre is leading the charge here, using an injection of funds from Goldman Sachs to built on its fibre footprint across the UK. CityFibre now has fibre infrastructure projects across 51 towns and cities, providing active and dark fibre services, most notably to Vodafone which is building its presence as an ISP.

The idea of emerging competition does seem to be spurring the sluggish Openreach into action, as the team has announced one million homes now fall into its fibre footprint. Openreach, and BT as the guiding hand, has often been criticised for lack of foresight when it comes to connectivity. For years, the team pursued fortunes via G.Fast while the industry was demanding fibre, with this inaction perhaps creating the fuel for the emerging competition.

While CityFibre still has the tag of a plucky outside bet, Virgin Media would certainly provide more food for thought. With 14.4 million homes passed throughout the UK, roughly 50% of households, it is a genuine alternative for ISPs who have nationwide ambitions.

We suspect such conversations are taking place behind closed doors in the Virgin Media offices. The UK infrastructure wholesale market is certainly primed for a shake-up, and Virgin Media has the footprint to capitalise.