Openreach pricing: The Sting in the TAR
Ofcom is curtailing Openreach’s price discounting for now, effectively setting a price ceiling based on theoretical altnet economics as opposed to Openreach’s own (much lower) fibre costs.
This restriction is however likely to prove time-limited, with VMO2-only areas and those with high altnet market share likely to be de-regulated first, and within the current regulatory cycle.
VMO2 and the altnets need to be prepared to compete on a more even footing, and would be wise not to hasten deregulation through their own actions, such as focusing on market share grabs as opposed to building a sustainable business model.
Related reports
Broadband market revenue for the ‘big four’ dipped to -2.5% in Q2, thanks to short-term seasonal factors and long-term altnet pressure.
The CMA decision on nexfibre-Netomnia is now not due until December, stalling much-needed further altnet consolidation, although CityFibre is looking to shortcut this with a capital raise.
Openreach has been curtailed by Ofcom in its ability to compete with altnets, but not with VMO2, which could lead to interesting dynamics should the deal go ahead.
Virgin Media O2: Hitting the nadir?
31 July 2026VMO2 suffered a dip in revenue growth in Q2, albeit mainly due to price rise phasing issues and the Daisy integration, with EBITDA growth actually improving.
There were some concerning signs however, with mobile net adds remaining stubbornly low. Full year 2026 guidance is still achievable, but a return to growth in 2027 is challenging.
Regulatory developments have been mixed, and VMO2 will have to be careful what it wishes for as regards the future competitive structure of the sector.
BT: Growth in prospect
30 July 2026BT’s revenue and EBITDA growth suffered a dip in Q1, but entirely due to one-off/seasonal factors, with underlying metrics strong across the board.
Ofcom has curtailed Openreach’s ability to compete with altnets, while allowing it to compete with VMO2, a much more established and long-term competitor.
The deconsolidation of International makes the potential for a return to sustainable revenue growth much more apparent, with multiple drags (altnets, voice, price mechanics) now firmly on the wane.
Broadband market revenue for the ‘big 4’ remains in decline as recovering subscriber trends are countered by worsening ARPU.
While abating altnet pressure should eventually lead to recovery, in the short term we expect revenue growth to worsen as the seasonal effect of annual price rises bites in the June quarter.
The longer-term outlook for the altnet sector is increasingly in regulators’ hands as the CMA decides on nexfibre/Netomnia and Ofcom decides on Openreach’s new special offer discounts
Telecoms Access Review (TAR): The eye of the storm
19 March 2026Ofcom’s final TAR statement offers continuity regulation of copper/fibre networks for the next five years, with fewer twists than expected, (sensibly) not moving the investment return goalposts as the altnet sector struggles to find a sustainable model.
Within the detail, broadband pricing regulation has an unwelcome cashflow impact on BT, leased line price cuts are much softer than originally proposed, Openreach appears to have more flexibility on Equinox-style offers, and some progress has been made on copper withdrawal rules.
Ofcom remains encouraging of altnet consolidation in general, seeing it as a way to enhance the effectiveness and sustainability of altnet competition, but is more wary of some types of deal, in particular those involving overlap such as the proposed VMO2/nexfibre-Netomnia deal.
Broadband market revenue for the ‘big four’ dipped to -2.5% in Q2, thanks to short-term seasonal factors and long-term altnet pressure.
The CMA decision on nexfibre-Netomnia is now not due until December, stalling much-needed further altnet consolidation, although CityFibre is looking to shortcut this with a capital raise.
Openreach has been curtailed by Ofcom in its ability to compete with altnets, but not with VMO2, which could lead to interesting dynamics should the deal go ahead.Virgin Media O2: Hitting the nadir?
31 July 2026VMO2 suffered a dip in revenue growth in Q2, albeit mainly due to price rise phasing issues and the Daisy integration, with EBITDA growth actually improving.
There were some concerning signs however, with mobile net adds remaining stubbornly low. Full year 2026 guidance is still achievable, but a return to growth in 2027 is challenging.
Regulatory developments have been mixed, and VMO2 will have to be careful what it wishes for as regards the future competitive structure of the sector.
BT: Growth in prospect
30 July 2026BT’s revenue and EBITDA growth suffered a dip in Q1, but entirely due to one-off/seasonal factors, with underlying metrics strong across the board.
Ofcom has curtailed Openreach’s ability to compete with altnets, while allowing it to compete with VMO2, a much more established and long-term competitor.
The deconsolidation of International makes the potential for a return to sustainable revenue growth much more apparent, with multiple drags (altnets, voice, price mechanics) now firmly on the wane.
Broadband market revenue for the ‘big 4’ remains in decline as recovering subscriber trends are countered by worsening ARPU.
While abating altnet pressure should eventually lead to recovery, in the short term we expect revenue growth to worsen as the seasonal effect of annual price rises bites in the June quarter.
The longer-term outlook for the altnet sector is increasingly in regulators’ hands as the CMA decides on nexfibre/Netomnia and Ofcom decides on Openreach’s new special offer discountsTelecoms Access Review (TAR): The eye of the storm
19 March 2026Ofcom’s final TAR statement offers continuity regulation of copper/fibre networks for the next five years, with fewer twists than expected, (sensibly) not moving the investment return goalposts as the altnet sector struggles to find a sustainable model.
Within the detail, broadband pricing regulation has an unwelcome cashflow impact on BT, leased line price cuts are much softer than originally proposed, Openreach appears to have more flexibility on Equinox-style offers, and some progress has been made on copper withdrawal rules.
Ofcom remains encouraging of altnet consolidation in general, seeing it as a way to enhance the effectiveness and sustainability of altnet competition, but is more wary of some types of deal, in particular those involving overlap such as the proposed VMO2/nexfibre-Netomnia deal.