Viewpoint Article by Ahmed Essam, CEO of Vodafone UK
Ahmed Essam, Vodafone’s UK chief executive, lends his support to Openreach’s new full-fibre wholesale pricing proposal, but asks wholesalers to introduce broadband social tariffs to help vulnerable customers
Vodafone has the widest full-fibre footprint in the UK through partnerships with wholesale fixed line providers such as Openreach and CityFibre. This means Vodafone superfast broadband services are now available to almost 12 million homes across the country.
Using our partners’ networks, rather than building our own, avoids needless duplication and cost and helps us remain agile in a highly competitive market. It’s how we can offer fast, reliable and affordable broadband to all our customers.
We all want to build Gigabit UK as fast as we can and we appreciate that our wholesaler partners are investing huge sums building out this full-fibre network of the future, with all the economic and societal benefits to customers across the country. It’s fair that they should want and need a return on their investment.
In fact, we welcome Openreach’s latest ‘fibre to the premises’ (FTTP) broadband pricing offer – called Equinox II – which it has presented to regulator Ofcom for consultation. It seeks to offer more affordable wholesale prices for fibre over the medium term, helping broadband retailers put together more attractive packages for consumers.
We think their proposed offer poses no threat to efficient alternative fibre providers and, importantly, doesn’t discourage retailers like Vodafone from using other wholesalers. Indeed, we hope to widen our use of alternative fibre providers in the near future.
We strongly believe that a competitive wholesale market is essential to ensure UK consumers benefit from good value, choice and innovation.
So we hope Ofcom will recognise the value of Openreach’s Equinox II offer to consumers and its important role in encouraging wider fibre adoption.
Help for vulnerable customers
But as a purpose-led business, we also want to offer broadband packages that are affordable for our most vulnerable customers. This is why we launched our social broadband tariff in October 2022 – the cheapest on the market at the time. At just £12 a month it represents fantastic value for money.
Unfortunately, it is unsustainable at that price.
Even though our costs having been rising sharply due to rampant inflation – our energy bills in particular have spiralled – we’ve kept our social tariff at £12 a month. But the wholesale element of that social broadband bill accounts for more than the entire retail price!
So if we’re going to continue offering affordable – financially viable – social tariffs to digitally excluded people – as we, Government and Ofcom want – we need Openreach, CityFibre and others to offer an equivalent wholesale social tariff at a substantially reduced rate.
We’re hoping Ofcom will support us in this ask.
Full fibre offers much faster download and upload speeds – the old copper networks are on the way out. We need to make these benefits abundantly clear to our customers if we’re to encourage them to switch up from legacy copper networks and justify all that infrastructure investment made by our wholesale partners. And we need to make full-fibre products and services affordable and easily available.
Ultimately, we want to build a full-fibre Gigabit UK that is fair for customers, retailers, wholesalers, and investors alike. To do this we must strike the right balance between the incentive to invest and the need to offer competitively priced products and services for all our customers, including those on benefits.
I firmly believe we can achieve that goal if we adopt a spirit of compromise and co-operation.
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