Wholesale broadband costs could drop by 11%

The GCRA has been examining the wholesale charges for broadband services, which retailers pay and then pass on to local businesses and residential customers.

It found that Guernsey was the fifth most expensive jurisdiction for broadband when compared against 29 European areas.

Provisionally the GCRA is suggesting that these charges should be lowered by 11% on average to create a better deal for end-users while ensuring profits are reasonable.

It follows a consultation with Sure and the other service providers, which suggested that prices were not efficient and that competition was not enough to bring prices down.

‘The GCRA provisionally concludes that regulatory interventions at the wholesale level are required to better facilitate competition and ultimately contribute to fairer prices for consumers,’ the report states.

Sure has an agreement with the States to roll out fibre broadband, with all properties being connected by the end of 2027. Other providers would then use that infrastructure.

The report noted that Sure hold a 93% market share in broadband and that was not likely to change.

The GCRA said it appreciated that the fibre roll-out was a significant project and while the States had granted Sure £12.5m., Sure would be covering the bulk of the £37.5m. costs.

‘Given that the fibre network roll-out is disruptive and costly, Sure should be given an opportunity to earn a return on those significant capital outlays in a proportionate and timely manner,’ the GCRA report stated.

This made the GCRA feel this was an appropriate time for the review.

It looked at 29 peer group countries across Europe, including small island jurisdictions, and found Guernsey was the fifth most expensive and was more expensive than Jersey and the Isle of Man.

But the GCRA looked beyond this in its study, also considering wage growth, efficiencies and inflation to draw its provisional conclusions.

If the changes were brought in, Sure’s wholesale broadband access price would drop by 11% from the start of next year. The GCRA is also proposing annual price caps for average monthly rental charges between 2024 and 2028.

The proposed decision is now out for consultation, with parties needing to respond by 14 July, and the GCRA expects to finalise its decision by the autumn.

Sure group CEO Alistair Beak said it would be considering the GCRA’s provisional view in detail and would submit a response to the GCRA.

• To find out more visit https://www.gcra.gg/.