Openreach threatens to scrap UK fibre rollout over Ofcom rules

According to Financial Times News, BT’s Openreach chief executive Clive Selley has threatened to scrap the final phase of its plan to deliver full fibre broadband to 30 million UK homes by 2030. The company is currently on track to reach 25 million homes by 2026 but says the business case for the remaining 5 million is undermined by Ofcom’s draft regulatory proposals. Selley specifically cited price controls and other restrictions in the Telecoms Access Review, which regulates the broadband market every five years. He’s putting approvals for the final 5 million homes on hold until seeing the final wording of Ofcom’s rules expected in spring 2025. This warning risks leaving millions of households without access to full-fibre broadband and represents a significant escalation in Openreach’s dispute with the regulator.

The regulatory standoff

Here’s the thing: this isn’t just about one company throwing a tantrum. Openreach argues that price caps and other restrictions make it impossible to justify the massive investment needed for that final, most difficult 5 million homes. We’re talking about rural areas, hard-to-reach properties – the expensive bits. Meanwhile, Ofcom sees itself as protecting competition, having successfully encouraged “altnets” like CityFibre to build their own networks covering over 16 million homes. But now Openreach says where there’s already competition from multiple providers, the restrictions should be lifted. It’s a classic infrastructure dilemma – how do you balance encouraging competition while ensuring someone actually builds in the tough spots?

The investment calculus

Selley’s basically saying the numbers don’t add up anymore. When you’re talking about connecting the last 20% of homes – which he calls “huge” – the costs skyrocket. And he’s not just blaming regulation. BT’s chief Allison Kirkby recently pointed out that UK telecoms pay ten times more in “government inflicted costs” like business rates than European peers. Add potential tax rises to regulatory uncertainty, and suddenly that £15 billion or whatever they’ve spent starts looking like it might be the end of the line. The business case has to work, or the board won’t approve the spending. It’s that simple.

What happens now?

So we’ve got a high-stakes game of chicken playing out. Openreach is essentially the only player with the scale and resources to finish the job – Selley explicitly says they’re “the only credible builder for the last tranche.” But they need regulatory certainty and what they consider reasonable pricing freedom. Ofcom meanwhile has to balance encouraging investment with preventing monopoly power. The spring 2025 decision will be crucial. If they stick with strict price controls, we might see that final 5 million homes stuck with slower broadband for years. If they give Openreach too much freedom, they risk undermining the competitive market they’ve worked so hard to create. Someone’s going to have to blink.