Narrowband Market Review

  • Start: 01 December 2016
  • Status: Closed
  • End: 29 March 2017

Consultation on the proposed markets, market power determinations and remedies for wholesale call termination, wholesale call origination and wholesale narrowband access markets.

About this document

The Narrowband Market Review 2017 covers five wholesale markets that underpin the delivery of retail fixed voice telephone services in the UK. The outcomes from this review are designed to promote competition and further the interests of residential and business customers.

We are reviewing three access markets: wholesale fixed analogue exchange lines (the standard fixed lines used by residential and business customers) and two markets that enable the delivery of digital telephone services to businesses to support applications such as call centre operations. The two digital exchange line markets are ISDN30 and ISDN2. In addition, we are reviewing wholesale call origination – a complementary service to the provision of analogue and digital exchange lines, which enables end customers to make calls over those lines.

This review also includes wholesale call termination, a connection service provided by a fixed telecoms provider when their customer receives a call. If customers call a UK geographic number (a number starting 01 or 02), their provider pays the terminating provider a wholesale charge, called a fixed termination rate.

This consultation considers the level of competition in each of these five wholesale markets. Where competition is not working effectively, we propose regulation that should apply for the period 1 October 2017 to 30 September 2020.

We will take all responses to this consultation into account before reaching our final conclusions, which we plan to publish in a statement in September 2017.

Narrowband Market Review PDF, 4.4 MB

31 March 2017

Ofcom has published its 2017 wholesale local access (WLA) market review consultation (WLA Consultation) setting out our provisional assessment of the WLA market, our proposed finding that BT continues to have Significant Market Power (SMP) and our proposed remedies including price control remedies and quality of service standards. The closing date for comments on the WLA market review is 9 June 2017.

Price regulation of virtual unbundled local access: impact on narrowband market review

As discussed at paragraphs 8.53-8.59 of the WLA Consultation, we propose that where Wholesale Line Rental (WLR) is used to provide the necessary copper bearer to support BT’s ‘40/10’ (40 Mbit/s download, 10 Mbit/s upload) Virtual Unbundled Local Access (VULA) service, we would expect that the WLR service would be charged to reflect the costs of providing a copper bearer.

This would mean that for BT to be able to use the pricing flexibility that we have proposed in the 1 December 2016 Narrowband Market Review Consultation (NMR Consultation) for Wholesale Fixed Analogue Exchange Lines (WFAEL), it would need to provide the ability for telecoms providers to use the 40/10 VULA service without needing to also purchase WLR in its present form (or MPF).

We consider that telecoms providers should be able to purchase VULA on a standalone basis, without being required to also purchase other services such as voice telephony over the BT network. Therefore, BT will be able to benefit from pricing flexibility on WLR in the WFAEL market when it offers an effective alternative copper support product to WLR in its present form. BT is already developing such a product, known as single order GEA (SOGEA).

Ofcom asks stakeholders to submit any additional comments on our proposals for the WFAEL market in the light of our WLA proposals by 21 April 2017.

Consultation on our proposed quality of service remedies

Ofcom has published a consultation setting out our proposals for quality of service remedies for WLR, MPF and GEA.

In the case of WLR, this consultation also develops the proposals set out in Section 9 of the NMR Consultation.

In paragraphs 8.73-8.78 we set out proposals for WLR which partially amend proposals set out in the NMR Consultation. Specifically, we propose to update our Reference Offer requirements and we are now proposing not to re-impose the 2008 SLG Directions.

We also make some clarifications to Draft Condition 6 in relation to the Reference Office requirements for ISDN services (see p284-289), to address omissions in the NMR Consultation.

24 February 2017

The Draft Legal Instruments Proposals for SMP services conditions set out in Annex 6 to the Narrowband Market Review consultation published on 1 December 2016 (the “Consultation”) included an omission in error.

This note supplements the Consultation by setting out the omitted text, and the Consultation (specifically Annex 6) should be read accordingly.

  1. Annex to draft Condition 5D: The following Annex to draft Condition 5D listing the services subject to the interconnect circuits charge control in that draft Condition 5D was omitted from the Consultation:

Annex to Condition 5D – Services subject to the interconnect circuits charge control[1]

  • i) External wholesale standard Customer-Sited Interconnect connections;
  • ii) External wholesale standard Customer-Sited Interconnect rentals – fixed;
  • iii) External wholesale standard Customer-Sited Interconnect rentals - per km;
  • iv) External wholesale interconnection extension circuits connections;
  • V) External wholesale interconnection extension circuits rentals – fixed;
  • vi) External wholesale interconnection extension circuits rentals - per km;
  • vii) External wholesale intra-building circuits connections;
  • viii) External wholesale intra-building circuits rentals;
  • ix) External wholesale in-span interconnection links rentals;
  • x) External nominated in-span interconnection links - per km; and
  • xi) External wholesale rearrangements.

1 Account only for the interconnect circuits connected at the DLEs.

20 February 2017

Ofcom will shortly publish a consultation on our review of the market for standalone landline telephone services.

We recognise that stakeholders may wish to consider the interactions between our wholesale and retail proposals – particularly in relation to wholesale fixed analogue exchange lines (WFAEL) and wholesale call origination (WCO) – before they finalise their responses to our December wholesale Narrowband Market Review consultation. We are therefore extending the final deadline for submissions to 29 March 2017.

Where possible, we ask stakeholders to provide their responses to our proposals by the original closing date of 28 February 2017, particularly where they relate to the wholesale call termination, ISDN30 and ISDN2 markets.

12 January 2017

Purpose of this document

This document sets out clarifications to the consultation document on the Narrowband Market Review published on 1 December 2016 (the “Consultation”), which can be found at:

This note supplements the Consultation, and the Consultation should be read accordingly.


Following publication of the Consultation, BT raised  concerns with us about the value we had calculated for its current average wholesale call termination (WCT) charge. The charge published in the Consultation was  0.029ppm and was used in our estimation of the financial impact of our proposals, our arguments around the use of a glide path, and the relevant draft condition (draft Condition 5C). BT stated that, by its own calculations, this should instead be 0.035ppm.

We have investigated this issue further with BT and have determined that the discrepancy is caused by differences in the volume mix (the  relative volumes of day, evening and weekend calls) assumed in the calculations. Using the most recent available data regarding the volume mix, we agree with BT that its average charge during the lacuna period is 0.035ppm in 2015/16 prices. [1] The Consultation should therefore be read with this value replacing the published value of 0.029ppm.

This issue affects three distinct parts of the Consultation:

  • In paragraphs 1.45 and A8.100 of the Consultation we calculated the overall reduction in industry revenues as a result of the proposed charge control as £7.7m over three years across all communications providers (CPs), or around 8p per year per line on average. Using a current average charge of 0.035ppm in this analysis results in a reduction of revenues of £14.5m over the review period, or around 14p per year per line on average.
  • In paragraphs 15.13-15.15 of the Consultation, we presented our assessment of whether a glide path or a one-off adjustment would be more appropriate to set the WCT charge control. This assessment referenced a current average charge of 0.029ppm as the starting point when we considered the glide path option. While starting from a charge of 0.035ppm would result in a  larger difference between the two options, we still consider that the difference is small in absolute terms and is insufficient to alter our proposal that a reduction to LRIC in the first year of the control is appropriate.
  • In draft condition 5C.1 of Schedule 1 within Annex 6 of the Consultation, we proposed to require that BT’s revenue-weighted average charge for WCT should not exceed 0.029ppm during the period from 1 October 2017 to 30 November 2017. This should be read as not exceeding 0.035ppm.

[1]This is based on the average charge in the 2015/16 charge control year (in accordance with BT’s voluntary pricing commitment, see and volumes in the 2015/16 financial year.

Related content

Review of fixed call origination and termination markets 2016-19: Call for inputs 2 Apr 2015

Review of the market for standalone landline telephone services 28 Feb 2017

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