You are on page 1of 25

Game-changing

Ethernet
price
reductions
A three year journey

Published 30 January 2015


We have undertaken all reasonable steps to ensure the accuracy of the
data in this pack. Information presented here is intended as a guide only.
Always refer to the Openreach price list for the latest information

First, high bandwidth


market trends
In line with expectations for our own base, we forecast the overall Ethernet & Optical market
to grow by 7% CAGR to 17/18
Growth will come from migration from TDM circuits plus movement from copper
100Mb is now the default product, particularly in the Access market
Demand for 1Gb circuits is forecast to drive an 80% increase in the base by 17/18
(representing 1/3 of installed base by 17/18)
>1Gb installed base itself is set to double over the next 4 years
Circuits serving businesses are expected to account for 72 per cent of overall growth.

Total Market
250%

10Mb

100Mb

1Gb

UK Ethernet & Optical Market - Bandwidth Split


>1Gb

224%

200%

180%
165%

150%

136%
100%
50%

23%

0%
13/14

14/15

15/16

16/17

17/18

Proportion of Ethernet Circuits

Ethernet & Optical Circuits (100%


index 13/14)

UK Ethernet & Optical Market - Growth Forecast

100%

4%

10Mb
5%

100Mb
6%

1Gb

>1Gb
6%

7%

80%

25%

27%

30%

31%

33%

52%

55%

56%

13%

8%

4%

15/16

16/17

17/18

60%
46%
40%

48%

20%
25%

20%

0%
13/14

14/15

Over the last two years our key price reduction


decisions have been driven by both the key market
trends and customer feedback.

Looking back:
You asked us to reduce 100Mb access prices, backhaul prices and look at
how we could improve certainty of Ethernet pricing:
In April 2013:

In April 2014:

What we did:
Ethernet Access Direct (EAD)
100Mb rentals reduced by between 25 and
33 per cent
The goal:
To make 100Mb Ethernet products
far more competitive and accessible
Since then:
Weve seen significant growth in Ethernet
adoption among SMEs
and for both public sector and large
corporate networks.

What we did:
Ethernet Backhaul Direct (EBD) rentals reduced
by 30 to 35 per cent. Also, used EAD price
reductions to offset introduction of a 548 fee to
cover first 2,800 of ECCs
The goal:
To help cut overall network costs and provide far
greater cost certainty.
Since then:
The market has continued to grow and ECC
restructuring has simplified bids for customers,
and made more sites economically viable.
The overall number of primary circuit EAD
orders incurring any ECC at all has fallen
from 30 to 8 per cent.

100Mb is now the default entry-level


Ethernet over Fibre service.

For the year ahead.


You asked us to look specifically at 1G prices and to continue to reduce
the overall cost of building networks.
As a result, our 1 April 2015 price reductions are focused on.
Supporting the market trend towards 1G by providing savings that you
could use to:
Offer lower cost upgrades from 100Mb to 1G services
Upsell resilience
Migrate businesses from legacy products to EAD 1G
Defend at risk customers / target major new contracts
Build compelling offers and propositions
While continuing to help cut overall network costs by providing extra
margin to help you:
Scale up existing backhaul to support more 1G services
Extend your networks to new sites (e.g. PoPs or cell sites)

Key 2015 price reductions


at a glance
Up to
-46%

Up to
-32%

-40%

-10%

EAD 1 Gbit/s connection


Greatest reductions apply to 1 & 5 year
term EAD 1Gbit/s products

Together these reductions


represent three year total
cost of circuit ownership
savings of up to 30 per cent

EAD 1 Gbit/s rental


Greatest reductions apply to 1 year
term EAD 1Gbit/s Local Access and
Local Access ROI

EBD 1 Gbit/s connection

EBD 10 Gbit/s rental

Meanwhile, the FlexZone


(WECLA) continues to offer
pricing flexibility beyond
our published nationwide
price reductions for any
applicable products and
orders.

A three year snapshot of key


price reductions

Product

Charge
type

Price in
2013

Price on 1
April 2015

Reduction
since 2013

EAD 100Mb LA

Connection

1,950

1,900*

-3%

Rental

2,131

1,605

-25%

1,950

1,950*

0%

Rental

3,629

2,400

-34%

Connection

2,500

2,050*

-18%

Rental

4,800

3,000

-38%

Connection

3,995

2,100*

-47%

Rental

7,779

4,200

-46%

Connection

4,575

2,100

-54%

Rental

7,782

5,448

-30%

Connection

14,000

12,000

-14%

Rental

30,400

13,962

-54%

EAD 100Mb Std Connection


EAD 1Gb LA

EAD 1Gb Std


EBD 1Gb
EBD 10Gb

*Connection
includes ECC
exemption of
2,800.

Grasp the
opportunity to
upsell
Game-changing EAD 1G
price reductions

Full details of all EAD 1G reductions, including SyncE and Enable


products can be found on the Openreach price list (ACCN OR401).

EAD 1G connection and rental


reductions
Charge type*

Current
price

% decrease

Price from 1
April 2015

Connection
Rental
Connection
Rental
Connection
Rental
Connection
Rental
Connection
Rental
Connection
Rental

2,450
4,440
7,500
7,200
3,900
5,664
7,500
9,000
4,000
7,998
9,500
12,804

-16%
-32%
-27%
-32%
-46%
-26%
-27%
-24%
-36%
-19%
-21%
-18%

2,050
3,000
5,500
4,899
2,100
4,200
5,500
6,798
2,550
6,498
7,500
10,500

5 year product

Charge type*

Current
price

% decrease

Price from 1
April 2015

EAD 1Gbit/s Local Access

Connection
Rental
Connection
Rental
Connection
Rental
Connection
Rental
Connection
Rental
Connection
Rental

2,450
3,600
7,500
5,799
3,900
5,625
7,500
7,599
4,000
7,800
9,500
10,710

-16%
-18%
-27%
-16%
-46%
-26%
-27%
-11%
-36%
-17%
-21%
-2%

2,050
2,952
5,500
4,851
2,100
4,152
5,500
6,750
2,550
6,450
7,500
10,452

1 year product
EAD 1Gbit/s Local Access
EAD 1Gbit/s Local Access RO1
EAD 1Gbit/s
EAD 1Gbit/s RO1
EAD 1Gbit/s Extended Reach

EAD 1Gbit/s Extended Reach RO1

60 month minimum period

EAD 1Gbit/s Local Access RO1


60 month minimum period

EAD 1Gbit/s
60 month minimum period

EAD 1Gbit/s RO1


60 month minimum period

EAD 1Gbit/s Extended Reach


60 month minimum period

EAD 1Gbit/s Extended Reach RO1


60 month minimum period

*With the exception of RO1 circuits, EAD connection prices still include a 548 charge that covers an ECC exemption of 2,800.
N.B. Reductions have also been made to EAD SyncE and Enable products. See supporting summary sheet for all price changes.

Seize the opportunities.

For new circuits:

Get 10 times the EAD bandwidth for less than 6 extra per day in year 1.
And with only a 1 year commitment!

Save 3,264 in year 1 for each new EAD 1G circuit


This could fund the entire connection for an EAD 100Mb circuit for resilience

Plus, on existing circuits, youll save:

Over 14,000 per year for every ten EAD 1G circuits

Thats 1,464 on rental for every EAD 1G standard circuit


This could fund 75% of the connection for an EAD 100Mb circuit for resilience.

*Compares the overall rental and connection charges for a standard EAD1G to a standard EAD 100Mb circuit.

Future-proof customers
And retain their connectivity
business for longer
Consider what you could offer to customers (or
potential customers) who are:

In segments where demand is accelerating the fastest

Pushing a 100Mb limit due to expansion plans or new


technology

On a sub-rated service and ready to step up

Ready to move from 100Mb to a sub-rated 1G service

Using legacy products* and ready to move to new


technology alternatives

On a 1G service and considering resilience

Currently with a competitor, but out of contract

Looking for a great deal.

*Remember: Openreach will be ending Support for all WES WEES BES products (up to
and including 1G, excluding WES Aggregation) from 1 April 2018.

We can work
through all the
price changes with
you and help you
decide how best to
grow your
business and
secure your base

Build for
tomorrow, for
less
EBD 1G and 10G price
reductions

EBD 1G connection reductions

Product

Charge type

Current
price

EBD 1Gbit/s Band A

Connection

3,500

2,100

EBD 1Gbit/s Band B

Connection

3,500

2,100

EBD 1Gbit/s Band C

Connection

3,500

2,100

% decrease

Price from 1
April 2015

-40%

EBD 1Gbit/s Extended Reach Band A

Connection

7,000

4,200

EBD 1Gbit/s Extended Reach Band B

Connection

7,000

4,200

EBD 1Gbit/s Extended Reach Band C

Connection

7,000

4,200

Connection for EBD 1Gbit/s is being reduced to make backhaul more competitive
in support of onward network sales.

EBD 10G connection and


rental reductions
Product
EBD 10Gbit/s Band A
EBD 10Gbit/s Band B
EBD 10Gbit/s Band C
EBD 10Gbit/s Extended Reach Band A
EBD 10Gbit/s Extended Reach Band B
EBD 10Gbit/s Extended Reach Band C

Charge type

Current
Price

% decrease

Price from 1
April 2015

Connection

12,250

-2%

12,000

Rental

15,600

-10%

13,962

Connection

12,250

-2%

12,000

Rental

18,501

-10%

16,560

Connection

12,250

-2%

12,000

Rental

26,982

-10%

24,150

Connection

24,500

-2%

24,000

Rental

31,200

-10%

27,924

Connection

24,500

-2%

24,000

Rental

34,101

-10%

30,522

Connection

24,500

-2%

24,000

Rental

42,582

-10%

38,109

Connection and rental for EBD 10 Gbit/s is being reduced to ensure EBD remains a viable
alternative to our Optical solutions.

How will you use the


backhaul savings?

Our latest cuts will bring the total


reduction for EBD 1G connection
and EBD 10G rental to 54 per cent
since 2013:
Product

Price in
2013

Price on 1 Reduction
April 2015 since 2013

EBD 1Gb
connection

4,575

2,100

-54%

EBD 10Gb
rental

30,400

13,962

-54%

From 1 April 2015 you will


automatically save:
Over 1,600 on annual rental for
each EBD 10G Band A circuit you
have today.
Plus 1,464 on annual rental for
each EAD 1G circuit on a one year
term. (Often used for backhaul).

Consider re-investing these


savings to boost any existing
backhaul network build plans

Re-invest the savings to win more


business

Upgrade existing backhaul to support upsell to


higher bandwidth
Fund new Points of Presence (PoPs)
Invest in new cell sites to support 4G mobile
rollout
Target new business parks, industrial areas or
enterprise zones.
Were here to help you compete,
whatever you decide.

Outdoor Opportunities
Street Access 100Mb price reductions

Note: Street Access price reductions are not related to LLCC . They are included here for completeness.

Street Access 100Mbit/s


reductions
10 January 2015:

Product

Charge type

Before 10
Jan 2015

% decrease

Since 10
Jan 2015

Initial circuit (per local end)


Subsequent circuit (per local end)
Remote end NTE

Connection
Connection
Connection

2,000
250
2,750

-12.5%
-20.0%
-9.1%

1,750
200
2,500

Product

Charge type

Until 1 April
2015

% decrease

From 1 April
2015

Initial circuit (per local end)


Subsequent circuit (per local end)
Remote end NTE

Rental
Rental
Rental

600
600
2,750

-16.7%
-16.7%
-59.8%

500
500
1,105

1 April 2015:

Street Access delivers bandwidth from a local exchange to terminating


units in remote street furniture, such as lampposts or street cabinets.
Price reductions here support:
Outdoor
opportunities

Mobile network operator business needs


Urban wireless networks
Public information point provision
Connectivity at events
Remote telemetry.

Other LLCC related


price changes
Excess Construction Charges
Ethernet Cablelink

Small Excess Construction


Charge (ECC) increases
Current
Price

Product

%
increase

Price from
1 April 2015

Survey Fee

255.58

1.8%

260.30

Drilling each external wall

238.33

1.8%

242.73

Drilling each internal wall concrete

144.01

1.8%

146.67

Drilling each internal wall non concrete


Cable installed into duct, buried or installed on poles including any jointing
required per metre
Blown Fibre per metre

43.60

1.8%

44.40

4.45

1.8%

4.53

3.13

1.6%

3.18

Blown Fibre tubing in duct per metre

2.83

1.8%

2.88

Internal cabling (inc. internal blown fibre tubing) per metre

5.06

1.8%

5.15

Under soft surface per metre

20.28

1.8%

20.65

Under foot way per metre

40.56

1.8%

41.31

Under carriage way or roads per metre

81.12

1.8%

82.62

Trunking & traywork within customers cartilage per metre

29.40

1.8%

29.94

New footway box small (surface area up to 0.5 sqm)

704.89

1.8%

717.93

New footway box medium (surface area between 0.5 and 1 sqm)

1,551.77

1.8%

1,580.47

New footway box large (surface area greater than 1 sqm)

2,687.72

1.8%

2,737.44

Provision of a Small carriageway box (surface area up to 1sqm)

2,484.87

1.8%

2,530.84

Provision of a medium carriageway box (surface area between 1 and 1.25 sqm)

3,042.70

1.8%

3,098.98

Provision of a large carriageway box (surface area above 1.25 sqm)

3,478.82

1.8%

3,543.17

New ductwork (including wayleave costs)

These price increases have been made in line with a construction cost index and will only apply to orders planned after 1st April 2015, with no rework for orders
which have yet to reach KCI3 (where ECCs are confirmed). This will benefit CPs as we will not revise upwards for orders that are yet to reach KCI3
The price of a survey fee will also be amended on the Non Served Premises, Standalone Survey and Short Duration Lines pricing pages.

Small Ethernet Cablelink


price increases
Product

Current
price

%
increase

Price from
1 April
2015

External connection charge


(pull in external cable up to 24 fibres and provide internal)

2,448.00

2.3%

2,504

External connection charge


(pull in external cable up to 48 fibre and provide internal)

2,881.00

2.3%

2,947

Internal cable connection charge variant 1


(room to room)

1,135.00

2.3%

1,161

Internal cable connection charge variant 2


(room to optical frame)

1,362.00

2.3%

1,393

Internal cable connection charge variant 3


(room to cable chamber splice)

1,813.00

2.3%

1,854

BT Cablelink (Backhaul) link rental charge per annum

25.20

1.9%

25.68

These price increases have been made to reflect an inflationary increase in costs.

Summary of
changes
And where to get
more information

Summary of all price changes


outlined in this pack
Up to
-46%

EAD 1 Gbit/s connection

Up to
-32%

EAD 1 Gbit/s rental

-40%

-10%

-9%
average

Up to:
-20% connection
-59.8% rental

1.8%

1.9%
to 2.3%

The greatest reductions apply to standard EAD 1Gbit/s


product (1 & 5 year term)

The greatest reductions apply to 1 year term EAD 1Gbit/s


Local Access and Local Access ROI

EBD 1 Gbit/s connection


EBD 10 Gbit/s rental

Bulk Transport Link (BTL)


(Regulatory requirement)

100Mbit/s Street Access


(not LLCC related)

ECCs
Small increases in line with a construction cost index

Ethernet Cablelink
Small increases in line with inflationary increase in costs

The FlexZone will


continue to offer
flexibility beyond
our published
nationwide price
reductions for any
applicable products
and orders.

More information
We are constantly reviewing our prices and the Openreach price list is
always the most reliable source of up to date pricing information.
All the latest documents including links to price list entries and
customer briefs can be found along with this pack at:
www.openreach.co.uk/pricereductions
To discuss how any of these price changes could benefit you, please
contact your Openreach sales and relationship manager in the first
instance.