FTTP On Demand 2025: Build Costs, Total Cost Analysis & Leased Line Comparison

FTTP (Fibre to Premises) marketed affordable high-speed connectivity alternative (gigabit-capable speeds under £100/month promotional messaging). Reality: FTTP on Demand troubled adoption history revealing three critical drawbacks: (1) 36-month minimum contracts, (2) £200/month typical monthly fees, (3) high installation/build charges (distance-dependent). Openreach 2018 cost reduction initiative (October 30 announcement effective February 2018): connection charge reduced £750→£92 (330Mbps/30Mbps service), distance-based fees replaced build charge model. Promise: affordable FTTP installation costs enabling mass adoption. Practice: comprehensive cost analysis reveals build costs remain prohibitive (£4,000–£39,000 range, average £22,300 typical), with inexplicable variance unrelated to build distance (£1.08–£32.09 per-metre cost variance = 2,871% regional variation). Total cost of ownership analysis (36-month basis): FTTP £261–£1,233/month equivalent vs. 100Mbps dedicated leased line frequently proving cheaper alternative (only 1 of 24 analyzed locations favored FTTP). Performance reality: GPON contention (shared capacity, worst-case 75Mbps speeds), inferior SLA vs. dedicated leased lines. Strategic comparison essential: FTTP promising but contradicted by build cost realities, leased line frequently delivering superior value proposition.

FTTP On Demand: Technology & Initial Promise

Technology Overview

FTTP delivery: Openreach fibre infrastructure to premises, GPON (Gigabit Passive Optical Network) technology enabling shared infrastructure (32 premises sharing single backhaul). Speed capacity: theoretical 300Mbps+ speeds (shared topology limit), affordability positioning (lower cost than dedicated leased lines). Market positioning: "affordable fibre" enabling businesses accessing high-speed connectivity without premium leased line pricing.

Pricing Structure Evolution: Openreach 2018 Changes

Pre-2018: connection charge £750 (excluding VAT), distance-based fees creating unpredictable costs. 2018 reform announcement: connection charge reduced £92 (excluding VAT), distance-based fees eliminated, replaced build charge model. Strategic intent: enabling FTTP adoption through cost reduction, making fibre accessible mass market. Actual outcome: build charge costs remaining high, adoption barriers persistent.

FTTP Build Cost Reality: Analysis & Variability

Build Cost Ranges & Averages

Sample analysis (24 Openreach locations surveyed March 2018): cost range £4,000–£39,000, average £22,300. Distribution: majority locations £15,000–£30,000 range, outliers £4,000 and £39,000. Strategic implication: high installation barriers preventing adoption despite marketing positioning.

Build Distance vs. Build Cost: Paradoxical Relationship

Logical expectation: longer distances requiring greater construction = higher costs. Actual finding: no correlation between distance and cost. Example: longest build distance (8,032 metres) yielding lowest cost (£4,000); short distance (1,895 metres) yielding highest cost (£39,000). Analysis conclusion: Openreach build cost methodology not distance-driven.

Build Cost Per Metre: Extreme Variability

Cost per metre calculation: total build cost divided distance. Range: £1.08–£32.09/metre. Ratio: highest cost £32.09 ÷ lowest cost £1.08 = 2,871% premium (highest vs. lowest location). Implication: identical build projects costing dramatically different amounts depending location. Explanation unclear: methodology unexplained, regional variation possible (labour costs, ground conditions, infrastructure density), or cost allocation methodology obscure.

Total Cost of Ownership: 36-Month Analysis

FTTP TCO Calculation

Assumption: 300Mbps/30Mbps FTTP service £150/month rental. 36-month contract TCO: (£150 monthly × 36 months) + build charge. Results: lowest TCO £9,400 (lowest build cost location), highest TCO £44,400 (highest build cost locations). Average TCO: approximately £22,000–25,000 (reflecting average build charges). Strategic insight: substantial upfront/early investment impacting 3-year commitment decision.

Monthly Equivalent Cost

Converting 36-month TCO to monthly equivalent: lowest £261/month (£9,400 ÷ 36), highest £1,233/month (£44,400 ÷ 36). Range: £261–£1,233/month. Significance: marketing positioning ("under £100/month") contradicted by total cost analysis incorporating build charges. Customer reality: effective monthly cost 2.6–12.3× marketing messaging depending location.

FTTP vs. Dedicated Leased Line: Total Cost Comparison

Leased Line Baseline

100Mbps dedicated leased line comparison: typical £250–300/month (36-month contract basis, no installation charges). Advantages: guaranteed symmetric speeds, dedicated bandwidth (no contention), superior SLA (99.9%+ uptime commitment vs. FTTP contention vulnerability).

Comparative Analysis Results

24-location FTTP sample compared 100Mbps leased line: only 1 location favored FTTP cost-wise. Remaining 23 locations: leased line cheaper total cost of ownership. Example comparisons: FTTP £261/month vs. leased line £290/month = leased line premium £29/month offset by superior performance guarantees; FTTP £1,233/month vs. leased line £290/month = FTTP 4.25× more expensive despite being contended shared infrastructure.

Performance & SLA Differential

FTTP speed guarantee: none (shared GPON network, speeds variable). Worst-case scenario: 32 FTTP users at maximum capacity = speeds degrade 300Mbps→75Mbps (2.4Gbps backhaul ÷ 32 users = 75Mbps maximum). FTTP SLA: inferior to dedicated leased lines (typically 95% uptime vs. leased line 99.9+%). Strategic implication: FTTP customer paying premium yet receiving inferior service guarantees vs. leased line alternative.

Gigabit Voucher Scheme Impact: Subsidy Reality

Voucher Program Details

Government Gigabit Broadband Voucher Scheme: eligible SMEs receiving £3,000 grant toward gigabit-capable connectivity. FTTP eligibility: voucher applied installation costs. Impact: £3,000 voucher reducing build costs (£22,300 average becomes £19,300 after voucher).

Subsidy Limitations

Voucher coverage: £3,000 maximum, insufficient high-cost locations (£39,000 build charges requiring additional £36,000 customer funding). Partial subsidy reality: program reducing adoption barriers but not eliminating for cost-prohibitive locations. Strategic implication: government subsidies inadequate addressing fundamental build cost issues.

Market Implications & Adoption Barriers

FTTP Adoption Obstacles

High installation costs despite Openreach reductions: primary barrier preventing mass adoption. Build charge unpredictability: customers unable estimating costs (£1.08–£32.09/metre variance making budgeting impossible). Total cost analysis: contradicting marketing positioning (£100/month promise vs. £261–£1,233/month reality). Leased line competitiveness: dedicated alternative frequently cheaper despite premium perception.

Market Trajectory

FTTP adoption lag: expected high-speed fibre catalyst not materializing due cost barriers. Alternative providers (CityFibre, Hyperoptic, independent operators): potentially offering superior pricing, installation terms. Future outlook: FTTP adoption playing catch-up until Openreach addresses build cost fundamental issues.

Strategic Connectivity Assessment: FTTP vs. Alternatives

FTTP Selection Criteria

FTTP suitable: locations with low build costs (sub-£10,000), budget-conscious operations accepting contended speeds, non-mission-critical applications. FTTP competitive: marginal locations where comparison leased lines similarly priced (superior FTTP speeds offset cost equivalence). FTTP avoidance: high build cost locations (>£15,000), mission-critical operations requiring guaranteed performance, operations requiring symmetric upload/download.

Alternative Assessment

Dedicated leased line: superior value frequently, guaranteed performance, predictable costs, mission-critical operations justified premium. Contended full fibre (CityFibre, independent operators): potentially superior pricing, installation terms vs. FTTP. Business broadband alternatives: FTTC, business fibre packages potentially competitive, simpler deployment. Whole-market connectivity comparison essential: identifying optimal provider/package matching requirements/budget.

Frequently Asked Questions

Are FTTP build costs improving?

Limited public evidence suggesting improvement post-2018 reductions. Build cost methodology remains opaque, regional variation persists. Recommend current build cost quote verification (recent Openreach assessment) rather than historical data extrapolation.

Is FTTP suitable for business-critical operations?

Not recommended: GPON contention creating speed variability (worst-case 75Mbps), inferior SLA vs. dedicated leased lines. Mission-critical operations requiring guaranteed uptime/speeds should prioritize dedicated leased lines despite premium pricing.

What if voucher reduces build costs?

Vouchers (£3,000 maximum) reducing barriers but not eliminating for high-cost locations. Total cost analysis recommended post-voucher application determining ultimate cost-effectiveness vs. alternatives.

What should we do next?

Obtain current FTTP build cost quote (Openreach assessment). Compare total cost ownership vs. dedicated leased line alternatives. Call AMVIA at 0333 733 8050 (direct expert, 90 seconds, no voicemail) for connectivity assessment: FTTP feasibility evaluation, leased line comparison, optimal provider identification. Download our FTTP comparison guide or request expert cost analysis.

---

Bottom Line: FTTP Build Costs & TCO Reality Contradicts Marketing Positioning

FTTP marketed "affordable fibre" enabling high-speed connectivity access (£100/month positioning). Reality: Openreach build charge methodology creating £4,000–£39,000 installation costs, average £22,300 typical. Total cost analysis: effective monthly cost £261–£1,233/month (36-month basis) contradicting affordability narrative. Comparative analysis: dedicated leased lines frequently delivering superior value despite premium perception (23 of 24 locations analyzed favoring leased line vs. FTTP).

Strategic decision: FTTP viable specific locations (low build costs), but comprehensive cost analysis essential before commitment. Whole-market comparison revealing alternatives (dedicated leased lines, independent full-fibre operators, business broadband) frequently delivering better value proposition. Businesses evaluating FTTP should perform due diligence cost analysis preventing overpayment for inferior guaranteed-performance alternative.

Evaluating FTTP feasibility? Call AMVIA at 0333 733 8050 for cost analysis. Most businesses identifying superior connectivity alternatives through comparison analysis, capturing cost savings while improving performance guarantees.

‍