14/12/2022    For Information

This briefing is for all Communications Providers (CPs).

This briefing is to notify CPs about the launch of a supplemental offer to the existing GEA-FTTP Equinox offer (Equinox 1) – the GEA-FTTP Equinox 2 offer (Equinox 2). Equinox 2 will amend and supplement Equinox 1 by introducing new rental and connection discounts and certain new terms and conditions. In particular, Equinox 2 will provide additional commercial incentives to Communications Providers (CPs) in order to encourage the adoption of GEA-FTTP through the migration of existing copper end customers to GEA-FTTP. The offer will be open to all Communications Providers, including those that have not previously signed up to Equinox 1. Equinox 2 will start on 1 April 2023.  

Openreach is pleased to announce the notification of the Equinox 2 offer, an optional overlay to the Equinox 1 offer launched on 1 October 2021 (previously notified NGA2021/21). Equinox 2 connection and rental discounts remain subject to the existing Equinox 1 commitment to place a target percentage of Openreach orders on GEA-FTTP, where available. Equinox 2 also introduces a ‘Failsafe Mechanism’ that eliminates any theoretical possibility of the Equinox offer disincentivising CPs from using alternative network providers, as set out in more detail below.

Objectives

Equinox 2 provides additional commercial incentives for CPs to accelerate their adoption of GEA-FTTP by migrating their existing copper end customers to GEA-FTTP.

Fibre Only measure and Failsafe Mechanism

The Equinox 2 offer will launch on 1 April 2023. CPs must achieve a target proportion (90%) of Openreach provision orders on Openreach GEA-FTTP, where GEA-FTTP is available, in order to be eligible for full connection and rental discounts.

There are no volume targets or exclusivity requirements in the Equinox offer. Although Openreach does not believe that there is any possibility of the Fibre Only measure having the effect of distorting incentives to use alternative network suppliers in areas where CPs have a choice between Openreach GEA-FTTP and other potential network suppliers, Equinox 2 also introduces a new Failsafe Mechanism which eliminates even a theoretical possibility of such a distortion. More details regarding the Failsafe Mechanism can be found here.

Pricing – key differences as compared to Equinox 1

Connections

Connection discounts remain aligned to Equinox 1, with the exception of additional discounts for the migration of CPs’ existing end customers from legacy services to GEA-FTTP. These additional discounts are introduced for the following speed variants only: 80/20 Mbit/s, 115/20 Mbit/s, 160/30 Mbit/s, 220/30 Mbit/s, 330/50 Mbit/s, 550/75 Mbit/s, 1000/115 Mbit/s, 1200/120 Mbit/s and 1800/120 Mbit/s.

*Same as Equinox 1

**New prices introduced by Equinox 2

The Year 6 review mechanism also applies (see below).

Rentals

The Year 6 review mechanism also applies (see below).

ARPU share mechanism

The existing ARPU share mechanism offers an additional return to CPs where their average revenue per line exceeds a certain level (e.g. as a result of achieving a higher speed mix). This level was initially set under Equinox 1 and is now reset to £16.95 under Equinox 2. Above this level, 50% of the ARPU calculated on all rentals on speeds covered by the offer will be returned to CPs. The ARPU share level will be indexed by CPI or 0% (whichever is higher).

Other key terms and conditions

Equinox 2 also amends certain other terms and conditions, as outlined below.  Full terms and conditions apply and are provided here.

Forecasting requirements

Forecasting requirements have been amended through the introduction of a new method of calculating the variance between actuals and forecasts.  In Equinox 2, Openreach will compare a CP’s forecast and actual volumes for each month and calculate the variance.  The variances for the three months within a Contract Quarter will then be averaged.  An average variance of no more than 10% in each Contract Quarter shall be permitted.  If CPs are above this variance for three consecutive Contract Quarters then this will result in a proportional loss of discount: for every percentage point outside of the permitted variance, CPs will have £1 deducted per line connected in the Contract Quarter (maximum deduction capped at £12.50 per line). CPs are also required to notify Openreach at least six weeks in advance if their forecasts are expected to be inaccurate by more than 20% in any given month.

Bulk moves clause – expanded scope

The existing ‘bulk moves’ clause under Equinox 1 allows the transfer of copper services (without change of product) between CPs without affecting Fibre Only performance. This allowance is now extended to include one-off acquisitions and where it is necessary for those end customers to have a change of service once acquired.

Year 6 price review

Under Equinox 1, Openreach has the right to increase rental prices and the APRU share threshold in Year 6 of the contract by up to £1.50, provided 6 months’ notice is given (to be issued prior to 30 September 2026). Under Equinox 2, Openreach is reducing the potential price increase to £1 (also including a requirement to give 12 months’ notice of the increase).

How CPs can take advantage of this special offer

CPs should contact their business development manager if they'd like to participate in this special offer. CPs will need to sign the special offer terms and conditions, using Adobe Sign. Depending on the date a CP signs the offer, it will be enrolled to start as of the beginning of the next Contract Quarter – CPs cannot join in the middle of a Contract Quarter.

For a short-hand summary of the offer, please see here.

This offer is being notified with 90 days’ notice under SMP Condition 8.6 as rental and connection discounts will be conditional on the range of services purchased.

This briefing supports ACCN OR828.

More information

If you've any questions about this briefing, please get in touch with your business development manager or customer experience manager.