The UK telecom regulator Ofcom has provisionally ruled that a significant discount offered by BT Openreach on full-fibre broadband services is unfair and could harm competition in the market. The proposed offer, which targets new full-fibre customers, may be withdrawn following concerns that it disproportionately affects rival networks that rely on attracting new customers to expand.

Ofcom’s preliminary assessment highlights that the “aggressive discounting” strategy by Openreach could undermine the financial viability of alternative network providers, known as altnets, by focusing substantial price reductions on the same customer segment these competitors need to grow. The offer would provide discounts of up to £9.50 per customer per month for up to 30 months, along with a one-time £50 discount in areas served by Virgin Media. These discounted rates apply exclusively to new customers joining the full-fibre network.

The regulator noted that such pricing may not allow competitors to recover their costs, given that they already offer low prices to all of their customers. Ofcom emphasized the importance of sustainable competition in promoting consumer choice and preventing future price increases.

Openreach informed Ofcom in June of its intention to implement these offers, following the regulator’s expectation that industry players provide advance notice of such promotions. This represents the first instance in which Ofcom is considering blocking a commercial offer from Openreach.

The move comes at a time when only about half of UK households eligible for full-fibre broadband have subscribed to the service. Ofcom stated that fair competition among networks is vital to encourage wider adoption.

Under the proposed offer, Openreach’s discounts target new customers critical to altnets’ growth potential, while leaving prices for existing customers unchanged. Ofcom expressed concern that this could hinder sustainable competition, potentially entrenching Openreach's dominant market position.

The regulator is currently seeking feedback from industry stakeholders and the public, with a consultation period open until August 27. A final decision on the matter is expected by the end of September.

Openreach has expressed disappointment at the provisional findings and defended its approach. James Lowther, managing director for commercial at Openreach, argued that the company operates in a competitive market and disagrees with Ofcom’s analysis, stating that regulation should not protect weak business models.

Meanwhile, Virgin Media O2 called on Ofcom to adopt stricter measures, accusing Openreach of deliberately seeking to solidify its dominance and limit competition in the broadband sector.