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TalkTalk and BT squabble over discount FTTP deal – report

The UK has made some progress in the past year with closing its fiber broadband gap, but one key rival to incumbent operator BT is warning that competition could be under threat if long-term deals to use the new Openreach "full fiber" network are not signed soon.

Openreach, the semi-detached network access division of BT, recently said it would spend £12 billion (US$15.5 billion) on delivering full-fiber infrastructure to 20 million UK premises by the mid-to-late 2020s.

Alternative broadband services provider TalkTalk is now complaining about apparent resistance from BT over the formation of long-term discount wholesale deals for access to the new fiber-to-the-premises (FTTP) network that Openreach is building across the UK.

In July, Tristia Harrison, the CEO of TalkTalk, said the alternative provider planned to launch FTTP services that month via BT's Openreach network, but indicated that TalkTalk was still in talks with Openreach about a new wholesale deal.

"In terms of a long-term agreement, it will take a bit of time," Harrison told Reuters at the time.

It seems that an agreement has still not been reached. In an interview with the Financial Times (paywall applies), Harrison said BT has argued that discounted deals with companies such as TalkTalk and Sky could be in breach of UK competition rules.

Under pressure

Harrison told the FT that BT's argument on competition rules was a "red herring” and striking such deals was logical. "The next three to six months are critical," she added. "The clock is against us."

Harrison has previously flagged a "combination of regulatory and commercial discounts" from Openreach as helpful in making fiber more profitable, enabling the service provider to report a fairly robust set of results for fiscal 2020 (ended March 31).

TalkTalk has already secured wholesale access to the fiber network that is under construction by CityFibre, the UK alternative network service provider. In January, CityFibre acquired FibreNation from TalkTalk Group, increasing CityFibre's rollout target from 5 million to up to 8 million premises.

For its part, Openreach pointed out that it has a "legal obligation to treat all of our customers equally."

"That means our full fiber products will always be available to every [provider] in the UK under the same prices, terms and conditions," Openreach told the FT.

CityFibre recently landed a multi-million-pound full-fiber backhaul contract with Three UK to connect an additional 1,300 mobile masts across 59 towns and cities.

Analysis recently commissioned by BT has also found that full fiber coverage will only reach 70% of UK homes and businesses by 2025, unless the government makes a number of new policy commitments and regulatory changes.

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— Anne Morris, contributing editor, special to Light Reading

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