Important pricing news Issue 2 1 August 2013 Including EBD 1G - PowerPoint PPT Presentation

Important pricing news Issue 2 1 August 2013 Including EBD 1G Connection Charge reduction from 1 September 2013

Key changes The BCMR and LLCC have concluded. This brings great news for you including:  Significant price reductions  Greater price certainty for the next 3 years  The arrival of the FlexZone (WECLA)

The FlexZone has arrived!  The FlexZone is a geographic area where Openreach has more flexibility to meet need Ethernet and Optical (WDM) connectivity needs.  Within the FlexZone we have greater pricing freedom for services above 1Gbit/s and the potential to do things differently for services that are 1Gbit/s and below.  It covers areas of Western, Eastern and Central London and parts of Slough.  It is the same as the geographical area (WECLA) defined by Ofcom in their 2013 Business Connectivity Market Review (formally defined by a list of postal sectors).  This area is deemed as most competitive for above 1Gbit/s Ethernet and Optical Services  The map below reflects the FlexZone area covered. A circuit eligibility / postcode checker will be available soon

FlexZone product / circuit eligibility The FlexZone is relevant to the following Ethernet and WDM (Optical) products: Ethernet Access Direct (EAD) Ethernet Backhaul Direct (EBD)   Optical Spectrum Services (OSS) Backhaul Extension Services (BES)   Wholesale Extension Services (WES) Openreach Network Backhaul Services (ONBS)   Wholesale End-to-End Services (WEES) Backhaul Network Services (BNS)   Circuits are considered inside the FlexZone if they connect either:  Two end user sites that both fall within FlexZone postal sectors, or  An end user site in a FlexZone postal sector to a network node inside or outside of the FlexZone, or  Two network nodes where the remote end of the backhaul circuit is in a FlexZone postal sector.

FlexZone versus ‘Rest of UK’ The FlexZone gives us the most freedom on Ethernet and Optical products that are above 1Gbit/s. There is also the potential in the FlexZone (compared to the rest of the UK) to do things differently for services that are 1Gbit/s and below. Ethernet up to and Ethernet over Optical including 1Gbit/s 1Gbit/s • Can’t increase prices Within the • • No price control Not regulated FlexZone • • No obligation to drop TOA pricing continues (WECLA) prices • We’re obliged to offer OSA/OSEA WDM services • • Price control (RPI-11.5%) applies No price control Rest of UK • • Can’t increase prices Prices don’t have to be cost oriented • Other regulatory rules apply (non- discrimination, price publication etc)

Price reductions and greater certainty for the future

The highlights  Up to 34% off Ethernet connection/rental  Decision taken to apply all price reductions to the new FlexZone too  29% average reduction to Excess Construction Charges (ECCs)  No price increases for three years − Applies to EAD, EBD, BES, WES, ONBS, BNS and BTL Together offering:  Greater certainty over pricing levels for the future  Greater ability to plan ahead  Tangible reasons to upgrade/migrate

Up to 34% off EAD 100Mbit/s Product Charge type Current Price % reduction Price from 1 May 2013 EAD 100Mbit/s LA Connection £1,950 £1,950 Rental £2,131 -25% £1,605 EAD 100Mbit/s Connection £1,950 £1,950 Rental £3,629 -34% £2,400 What this means to you:  Take advantage of best ever EAD 100Mbit/s rental prices! (Now considerably cheaper than EAD 10Mbit/s rental which itself is down 10% to £3,000)  Upsell existing customers from EAD10Mbit/s to 100Mbit/s (Still just £45)  Pricing that could help improve retention of existing customers and attract new ones  Clear reasons to target new customers with higher bandwidth products at competitive price points  The added value of Ethernet compared to EFM becomes even greater  A great time to migrate your lower bandwidth WES/BES/WEES circuits to EAD.

EAD 100Mbit/s Connection offer Product Offer Period Current Price % reduction Rebate level EAD 100Mbit/s LA 1 June 2013 to £1,950 -50% £975 31 October 2013 EAD 100Mbit/s 1 June 2013 to £1,950 -50% £975 31 October 2013 EAD 100Mbit/s 1 June 2013 to £2,440 -50% £1,220 Extended Reach 31 October 2013  Applies nationally ( Subject to terms and conditions and survey. Excludes the Hull area)  Offer will apply to all orders placed between 1 June 2013 and 31 October 2013, and installed by 31 January 2014  A rebate will be made against March 2014 bills  Cannot be used in conjunction with any other future or existing offer  Doesn’t apply to RO1 resilient circuits

Up to 20% off EAD 1Gbit/s Product Charge type Current Price % reduction Price from 1 May 2013 EAD 1Gbit/s Connection £3,995 -2% £3,900 Rental £7,779 -13% £6,741 EAD 1Gbit/s 5 yr Connection £3,995 -2% £3,900 Rental £6,300 -4% £6,048 EAD 1Gbit/s RO1 Connection £7,500 £7,500 Rental £12,900 -7% £12,000 EAD 1Gbit/s RO1 5 yr Connection £7,500 £7,500 Rental £9,284 -5% £8,799 EAD 1Gbit/s ER Connection £5,000 -20% £4,000 Rental £9,819 -14% £8,400 EAD 1Gbit/s Connection £5,000 -20% £4,000 Extended Reach 5 yr Rental £8,621 -7% £7,998 EAD 1Gbit/s Connection £9,500 £9,500 Extended Reach RO1 Rental £16,929 -11% £15,000 EAD 1Gbit/s Connection £9,500 £9,500 Extended Reach RO1 5 yr Rental £12,600 -6% £11,898

13% off EBD 1Gbit/s Connection Charge from 1 September 2013 On 1 August 2013 Openreach announced that the EBD 1Gbit/s Connection charge would be reduced by 13% from 1 September 2013. Product Charge type Current % reduction Price from Price 1 September 2013 EBD 1Gbit/s Band A Connection £4,575 -13% £4,000 EBD 1Gbit/s Band B Connection £4,575 -13% £4,000 EBD 1Gbit/s Band C Connection £4,575 -13% £4,000 EBD 1Gbit/s Connection £9,150 -13% £8,000 Extended Reach Band A EBD 1Gbit/s Connection £9,150 -13% £8,000 Extended Reach Band B EBD 1Gbit/s Connection £9,150 -13% £8,000 Extended Reach Band C

Up to 21% off EBD 10Gbit/s Product Charge type Current % reduction Price from Price 1 May 2013 EBD 10Gbit/s Band A Connection £14,000 £14,000 Rental £30,400 -21% £24,000 EBD 10Gbit/s Band B Connection £14,000 £14,000 Rental £36,045 -21% £28,473 EBD 10Gbit/s Band C Connection £14,000 £14,000 Rental £52,542 -21% £41,505 EBD 10Gbit/s Connection £28,000 £28,000 Extended Reach Band A Rental £60,800 -21% £48,000 EBD 10Gbit/s Connection £28,000 £28,000 Extended Reach Band B Rental £66,445 -21% £52,473 EBD 10Gbit/s Connection £28,000 £28,000 Extended Reach Band C Rental £82,942 -21% £65,505  Great news for LLU operators who are keen to offer greater value to their end users  Benefit from lower rental charges when you choose EBD instead of BES

ECCs reduced by 29% on average (1) Where Excess Construction Charges (ECCs) are required these price reductions (ranging from 7% to 50%) will significantly reduce the overall cost of new circuit provision. Product Current Price % reduction Price from 1 April 2013 Survey Fee £350 -28% £252.40 Drilling each external wall £330 -29% £253.37 Drilling each internal wall non concrete £60 -28% £43.06 Drilling each internal wall concrete £200 -30% £142.22 Cable installed into duct, buried or installed on £7.50 -41% £4.40 poles including any jointing required per metre Blown Fibre per metre £4.00 -23% £3.10 Blown Fibre tubing in duct per metre £3.50 -20% £2.80 Internal cabling (including internal blown fibre £8.00 -38% £5.00 tubing) per metre

ECC price reductions (2) Product Current % Price from Price reduction 1 April 2013 New ductwork (including wayleave costs) - Under soft surface per metre £35.00 -43% £20.03 - Under foot way per metre £80.00 -50% £40.06 - Under carriage way or roads per metre £140.00 -43% £80.12 Trunking & traywork within customer’s cartilage £40.00 -27% £29.04 per metre New footway box small (surface area up to 0.5 £750.00 -7% £696.12 sqm) New footway box medium (surface area £1,650.00 -7% £1,532.47 between 0.5 and 1 sqm) New footway box large (surface area greater £2,850.00 -7% £2,654.28 than 1 sqm)

ECC price reductions (3) Product Current Price % Price from reduction 1 April 2013 Provision of a Small carriageway box £3,150.00 -22% £2,453.96 (surface area up to 1sqm) Provision of a medium carriageway box £3,850.00 -22% £3,004.84 (surface area between 1 and 1.25 sqm) Provision of a large carriageway box £4,400.00 -22% £3,435.54 (surface area above 1.25 sqm) Weighted average ECC reduction -29%  ECCs apply to approximately a third of customers circuits  Where ECCs are required this will significantly reduce the overall cost of new circuit provision  New ECC prices will come into effect from 1 April 2013.

Up to 22% off WES Aggregation Charge Current % Price from WES Aggregation Product type Price reduction 1 May 2013 Connection £2,750 £2,750 WES Aggregation 10Mbit/s Access Rental £1,258 -20% £1,050 WES Aggregation 100Mbit/s Access Connection £2,750 £2,750 Rental £2,566 - 22% £2,010 Prices are per end