Market A pricing on FTTC

I have a relative on an exchange with no LLU, and Market A pricing, as confirmed by a price check on Plusnet ADSL.

When doing a price check on fibre, after intro discounts end, Plusnet comes out at £22.49 for unlimited fibre instead of Plusnet's usual £14.99 price - which suggests Market A pricing, inflated like their ADSL offering.

Sky on the other hand comes out at £20 for unlimited fibre, which is their usual price, and is not inflated unlike their Sky Connect ADSL Market A offering.

So my question, does Market A wholesale pricing affect FTTC or not?

Short answer, it looks as if it does, but it isn't justifiable.

Long answer, Openreach WLR3 pricing, which is for the copper phone service, doesn't appear to distinguish between Market Categories.

That suggests to me that the price differential seen on Plusnet's services is coming from BT Wholesale prices for broadband. I.e. that the Ofcom rules are to cause higher broadband costs for its ISPs rather line costs. The idea being, as we all know the categorisation is for, to allow LLU suppliers to compete by placing their kit in the exchange.

In relation to the exchange in question, Sky Connect will be paying the higher BTW price for the ADSL service. On FTTC they will not. Just the normal line rental plus the FTTC cost at the headend exchange direct from Openreach as well.

Plusnet will be paying the higher BTW FTTC rate because of the subscriber exchange's market rating. Madness. I wonder if Plusnet or BT Wholesale have it wrong, and that on FTTC the Market Category should be that of the headend exchange?

Edited by RobertoS (Sat 07-Nov-15 15:04:05)

In reply to a post by RobertoS:

Plusnet will be paying the higher BTW FTTC rate because of the subscriber exchange's market rating. Madness. I wonder if Plusnet or BT Wholesale have it wrong, and that on FTTC the Market Category should be that of the headend exchange?

On Market A exchanges, I don't think Plusnet are paying more for FTTC on a wholesale level than Sky are. I've checked a couple of other WLR3 providers and none of them are inflating the FTTC price based on the exchange being Market A.

I suspect therefore that Plusnet are inflating the FTTC price on a retail level despite them not paying a premium on a wholesale level, in order to make more profit in Market A areas.

Unless the others offer lower ADSLx prices in Market B, as Plusnet do, their FTTC price is irrelevant. It just means they are overcharging for ADSLx. The old fallacy that Plusnet charge a premium in Market A. They don't - they cut the price in Market B where the others don't.

EE can't be used for comparison either, as their pricing is based on what was Orange LLU or not.

Edited by RobertoS (Sat 07-Nov-15 16:38:56)

Isn't Plusnet's propaganda that they offer lower prices in "low cost areas" so that must be exchanges now classed as Market B, not sure if a single LLU provider makes an exchange's classification A or B

In reply to a post by RobertoS:

EE can't be used for comparison either, as their pricing is based on what was Orange LLU or not.

Zen can be used for comparison, since on ADSL they have different pricing for Market A and Market B, their Market A price for unlimited ADSL for instance is an eye-watering £79 per month, vs £49.50 for Market B exchanges (both Office products, Zen have no unlimited Home product for ADSL on Market A exchanges). On VDSL, Zen charge £22.50 for unlimited VDSL on both Market A and Market B exchanges.

So it does look to me like Plusnet are charging a premium on FTTC on Market A exchanges despite there being no increase in wholesale costs.

Edited by Oliver341 (Sat 07-Nov-15 22:24:10)

Looks a bit that way.

In reply to a post by Oliver341:

Zen can be used for comparison, since on ADSL they have different pricing for Market A and Market B, their Market A price for unlimited ADSL for instance is an eye-watering £79 per month, vs £49.50 for Market B exchanges (both Office products, Zen have no unlimited Home product for ADSL on Market A exchanges). On VDSL, Zen charge £22.50 for unlimited VDSL on both Market A and Market B exchanges.

Are you sure that Zen draw a distinction on Market A and Market B? I thought - maybe wrongly - that Zen charge higher ADSL prices on 20CN only exchanges, reflecting the higher backhaul costs. If Zen have a PoP or WBC is available (which is always the case for FTTx), there is no premium.

I think you've picked up on something important in the discussion David, in that we can't be sure if Oliver is referring to 20CN ADSL or 21CN WBC ADSLx.

Plusnet charge extra even when WBC is present on Market A exchanges. I think you are right that Zen charge extra when WBC is absent, and I believe that is the case even if LLU is available. (Their own backhaul provision isn't full LLU. I don't know if they have it at any non-WBC exchanges).

Zen is different in that it is using its own backhaul network for WBC data where ever possible, which can undercut WBC backhaul pricing.