"Market" Pricing

With so much alleged competition I am baffled by the continuation of different rates on different exchanges. My sister is moving four miles up the road to a different exchange which is no longer a "low cost" one.

Strangely looking at Uswitch BT and John Lewis seem to be charging the same as everywhere else but PN want a tenner a month more for the basic BB service. Am I missing something?

I suppose one should be grateful for a decent service at all!

Strange re John Lewis but could be a policy choice.

Re Plusnet charging more, that is incorrect. The correct interpretation is that the other ISPs are charging high in Plusnet's low cost area.

Costs in Plusnet's low cost area are lower for all BT Wholesale-based ISPs. Very few pass that on. Plusnet are to be commended.

EE used to charge differently as well, but not for the same reason as Plusnet. It was based on the old Orange LLU areas. Similarly O2 had, and Sky, TalkTalk and probably Vodafone have similar price differences.

"Never knowingly undersold".

The OP is quite correct when he states that PN want more money per month for the basic BB service outside 'low cost areas'.

Oddly I have a PN ADSL service at a Market A exchange. At the moment the BB itself is FOC, and I am expecting to have to leave when the 18 month contract expires in September. Vodafone would provide FTTC for a much lower price.

Plusnet give a lower price in low cost areas. Others don't.

I think if you look at the prices BT and EE charge you will find the Plusnet prices at "out of low cost" areas (normally Market A exchanges) will be comparable with those. Introductory customer-grabbing offers excluded.

In other words the higher Plusnet prices are similar to what the others charge everywhere.

So which are doing the ripping-off?

The Plusnet customers at Market A exchanges who have to pay more than those at other exchanges are being ripped off. The phone costs are the same at both types of exchange so why are do the broadband prices differ now that we live in an age where take up rates are very high?

We live in a world of introductory offers and you have to keep moving, or haggling with a supplier to get the best prices. People don't like changing which is why suppliers can get away with the higher prices. Logically if everyone kept moving the prices would be much more similar.

The costs to the ISP are not the same. The wholesale pricing is based on a Market A exchange. Ofcom subsequently allowed BT to lower the wholesale pricing in exchanges that had more competition but do not allow BT to lower the prices in the old Market A areas.

PlusNet use the lower wholesale pricing to provide cheaper broadband in those exchanges.

Ofcom do this because they want to encourage competition in the Market A exchanges and believe the best way to do this is to make the wholesale price artificially high.

So, blame Ofcom for not allowing BT to provide lower wholesale prices in Market A. But, you shouldn't blame PlusNet for passing on the lower wholesale costs in the other exchanges.

Because BT Wholesale charge more where there is no LLU. That's what Market A is. This is also why Plusnet deals on ADSLx are rarely available on Market A exchanges.

As for users haggling and having to keep moving, most don't. Even retention deals are becoming much less generous.

Edit. As Ian says but I forgot. It's Ofcom force BTW to charge more, for the reason he gives. To encourage LLU suppliers to install their kit, as the Market category does not change immediately when they do. It changes occasionally, as in has only done so two or three times since LLU came along.

Edited by RobertoS (Tue 31-Jan-17 08:30:41)

Sky used to do this - it would almost double the headline quote as they only offered 'sky broadband connect' I think it was called? Now when checking my Market A exchange it tells me I can't actually get broadband from them anymore - but can get line rental. Odd.

I wonder if they like TalkTalk wont supply off network exchanges anymore.

Are any providers still rolling out LLU? If not I would think higher pricing in Market A exchanges is no longer justified by OFCOM?