BT launch new discounts as Openreach become 'independent'

simon chandler
By Simon Chandler

bt openreach

BT have revealed new discounts on their Unlimited broadband and phone packages, undercutting the special deal they were offering only a week ago by as much as 25%.

The new discounts make their Unlimited Broadband, Unlimited Infinity 1 and Unlimited Infinity 2 packages available at £24.99, £29.49 and £44.99 per month respectively.

At the same time, BT have also announced that they've finished forming the "independent majority" that will comprise Openreach's new board, which now consists in seven members.

By forming such a board, they hope they'll be able to reach a voluntary agreement with Ofcom that will prevent their legal separation from Openreach, although it's still not clear that they will escape such a fate.

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For now, they can rest content with launching new special offers immediately after previous ones have ended, as they've done today.

Only one day ago, they were offering new customers the chance to receive their Unlimited Broadband, Infinity 1 and Infinity 2 packages for a year for the total monthly fee of £32.99, £34.99, and £44.99 respectively.

This deal ended yesterday at midnight. However, rather than returning to a "normal" price for new customers, BT have simply changed the special offer.

And as the table below shows, the new monthly rates they're offering - until February 23rd - are more generous than those they previously available.

Unlimited BroadbandUnlimited Infinity 1Unlimited Infinity 2
Monthly rate of previous offer£32.99£34.99£44.99
Monthly rate of current offer£24.99£29.49£44.99
Difference£8.00 (c. 24%)£5.50 (c. 15.%)£0.00
MasterCard reward card£50£100£100

However, while the 17Mb and 52Mb packages offer significant savings compared even to the previous special offer, the 76Mb service - Unlimited Infinity 2 - sees no change, although it is £5 cheaper a month that its normal rate.

And while the monthly fees are more generous for the most part, the MasterCard reward card they're offering are less generous. With the 17Mb Unlimited Broadband package, it's worth £50 less than it was worth yesterday, while the same applies to the 52Mb and 76Mb packages.

Still, given that new Unlimited Broadband subscribers will be saving £8 a month compared to those who signed up during the previous offer, they'll still be £46 better off across the entire year.

Similarly, new subscribers to Unlimited Infinity 1 will be £16 better off across the entire year, although those who sign up to Unlimited Infinity 2 will have missed out on extra £50, since their monthly subscription hasn't received an additional discount to compensate the drop in the MasterCard reward card's value.

Churn and Openreach

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As interesting as the differences between back-to-back special offers may be, what's more interesting is BT's apparent aggressiveness in running them so close to each other.

As we've reported previously, this is partly because BT want to recover from a poor start to the year. Yet added to this, it's most likely also because their "churn" rate - which measures how often customers leave the provider - is relatively high, sitting at over 20% for customers who subscribe to only one BT service and at around 10% for those who subscribe to two.

Part of the reason for such a churn rate may be that BT still top Ofcom's list for customer complaints when it comes to broadband.

Even though they remain at the top of this category, they have been improving as of late, so their continuation of special offers may see this trend continue further.

And it if it does, it will please Ofcom, who BT also appear to be trying to please via their putting together of a mostly "independent" Openreach board.

These senior leadership changes are all about strengthening our relationship with the outside world and building even more productive partnerships with everyone that has a stake in our business.
Clive Selly, CEO Openreach

Today, they announced the appointment as a non-executive chairwoman of Liz Benison, who is a chief executive at the public services provider Serco.

Her appointment completes the new board, which will theoretically make Openreach operate in a more impartial way with regards to BT and their rivals, and which will theoretically convince Ofcom not to go ahead with their plans to legally separate BT from their subsidiary.

However, whether such plans will work out in reality is another question entirely, but at least for the time being new customers can take advantage of BT's ongoing attempts to keep everyone happy.