Business · Companies · 3 hrs ago
UK regulator blocks one BT discount but allows another in VMO2 areas
UK regulator Ofcom has blocked one BT discount offer but approved another as the company competes to grow its broadband business.
Openreach, BT’s network subsidiary, cannot give providers such as Vodafone, Sky and TalkTalk a £9.50 monthly discount for using its fibre network.
From October, it can pay other companies £50 for each net new customer they attract in areas where it competes directly with VMO2.
VMO2, which is half-owned by Telefónica and half by Liberty Global, argued that BT could use its position to squeeze rivals; Ofcom said the approved offer is more limited and does not threaten competition.
The decision allows targeted discounts while blocking a broader offer that Ofcom said rivals could not match without making losses.
VMO2 says the regulator should have gone further and wants alternative networks to have incentives to invest and grow.
Competition reviews of related deals are still under way, including scrutiny of a proposed Netomnia purchase and BT’s rescue of TalkTalk.
Ofcom has blocked a proposed £9.50 monthly discount by BT’s Openreach to wholesale companies using its fibre network.
The UK regulator said the offer could prevent rivals from matching prices without making losses and could harm the development of competing networks.
Ofcom has allowed a separate £50 discount for third-party companies for each net customer gained in areas where BT competes directly with VMO2.
VMO2 welcomed the rejection of the monthly discount but said Ofcom should have gone further.
Ofcom said the per-customer offer was less significant because it applied only in some areas and did not threaten competition.
- Who
- Ofcom, BT’s Openreach and VMO2 are involved. The discounts would be offered to third-party companies.
- What
- Ofcom blocked a £9.50 monthly wholesale discount but allowed a £50 discount for each net customer gained in some areas.
- When
- The £50 discount has been authorised from October 2026. The article describes the other decision as recent.
- Where
- The United Kingdom, including areas where BT competes directly with VMO2.
- Why
- Ofcom said the monthly offer could harm competing networks and make it impossible for rivals to match prices without losses. It considered the other offer less significant and not a threat to competition.
Ofcom
VMO2
Impact of the monthly discount
Ofcom
Ofcom said the offer was not fair or reasonable because rivals could not match its prices without making losses.
VMO2
VMO2 welcomed the rejection of the offer and said Ofcom should have gone further.
Per-customer discount
Ofcom
Ofcom said the offer was less significant, applied only in some territories and did not endanger competition.
VMO2
VMO2 argued that BT was using its dominant position to try to “strangle” competition and called for protections for alternative networks.
Ofcom authorised the £50 discount for each net customer gained in areas where BT competes directly with VMO2.
The article said the proposed Netomnia acquisition was expected to close this year.
- Blocked discount
- £9.50 per month for wholesale companies using Openreach’s fibre network
- Allowed discount
- £50 per net customer gained in VMO2 areas
- Regulator
- Ofcom
- VMO2 ownership
- 50% Telefónica and 50% Liberty Global
- Netomnia acquisition
- About €2.3 billion
- TalkTalk rescue
- €470 million
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What people are saying
not fair or reasonable
We welcome Ofcom clipping Openreach’s wings on its most aggressive offer, although we believe it should have gone further
Openreach’s drip-feed of special offers has to stop at a time when competition is beginning to emerge