Openreach CEO Threatens to Scrap 30M UK Premises Target for FTTP Broadband
The CEO of network access provider Openreach (BT), Clive Selley, has warned Ofcom and the UK Government that he is “going to hold fire” on seeking approval for the final phase of the operator’s plan to deploy full fibre (FTTP) based broadband ISP technology to 30 million premises. At least until the regulator and tax environment show themselves to be favourable.
At present Openreach is investing up to £15bn to expand the coverage of their new “full fibre” network to 25 million premises by December 2026 (here), which will include around 6.2m in rural or semi-rural areas. In addition, they’ve long expressed an ambition to reach “up to” 30m by 2030 (there are c.33m in the UK), which is often said to be partly dependent upon a favourable outcome from Ofcom’s next Telecoms Access Review 2026 (TAR) and government policy (planning and taxation etc.).
However, the news has recently been full of stories from senior figures at BT (as well as rivals like Virgin Media), most of whom have been complaining about the threat from a huge rise in business rates potentially impacting their plans (here and here). In response, Openreach’s boss also seems to now be warning that this, when combined with Ofcom potentially choosing not to soften their regulation enough (i.e. to reflect an increase in market competition), could result in the operator having to shelve or scale-back their plans for reaching 30m premises.
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Clive Selley, Openreach CEO, said (FT):
“I’m going to hold fire getting approvals for that final 5mn tranche [of homes] until I see what comes out of the TAR.
If I can’t see where the regulation is going to land then I can’t articulate the business case [internally] and therefore that business case goes on hold until we see the final wording.
These are worrying times for the UK because, as the only credible builder for the last tranche of homes … it’s incumbent on us to keep the programme going”
No doubt some of Openreach’s rivals in the alternative network space, which would very much welcome the operator’s surrender of their build targets and retreating from costly rural deployments, may take exception to the incumbent describing themselves as “the only credible builder” for such premises. But in fairness they are the only large-scale builder in rural areas, with others like B4RN, Gigaclear, GoFibre, Quickline etc. tending to operate at a much smaller scale.
The risk for Openreach and BT, as hinted above, is that any weakening of their ambitions might risk leaving them at more of a competitive disadvantage in those rural areas. On the other hand, most of their rivals in the alternative network space are currently under heavy pressure from wider economic conditions (i.e. they may lack the ability to pick up the slack), particularly given how many of them have had to slow or stop their own builds.
As usual, there is a difficult balance act to be performed. The government needs to generate more money to fill holes in its next budget, while Ofcom has to consider the many vested interests of different market players and network operators have to figure out how they can continue building or pay investors back, without such projects becoming unviable (some may already be at risk of this).
Finally, it’s worth remembering that Clive Selley is technically not saying anything new, since Openreach have always pegged their plans for reaching “up to” 30m premises with FTTP on a favourable outcome from the TAR. But that was before the threat of much higher business rates entered the room, which adds another challenge.
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The government have already had to put their Project Gigabit target – for reaching 99% of the UK with gigabit broadband – back from 2030 to 2032, but it’s now not impossible that this may end up having to be put back even further if they aren’t careful.
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook, BlueSky, Threads.net and Linkedin.
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Sounds like a cheap black mail. I would tell him to f off, if not OR or Virgin then somebody else will do it.
It seems somewhat ironic that Openreach (among others to be fair) are receiving significant amounts of government subsidy to help roll out their networks for rural locations and then complain that they’re going to be taxed on those very assets that the public purse helped fund and that they ultimately get to make profit from.
I’d actually support a two tiered system, higher business rates on providers leveraging public purse funds and lower rates for those doing it entirely commercially. Maybe that would give more incentive to infrastructure builders to stop abusing the public purse.
Most of the 30bn is not tax payer money it’s internal commercial investment
No they won’t. For many of us, OR is THE only game in town. No one else will touch areas like ours. And we are not even rural.
And Virgin? Don’t even get me started.
Except they haven’t yet, and they won’t if the maths doesn’t work out.
@Name says
Really, well spare a thought for the people in Dankshire Town, let down by two altnets. We have OR sorting out the infrastructure, and hopefully getting fftp soon.
We have chocolate biscuits and tea/coffee at the ready.
I don’t need to remind that the political party in power stymied fibre many years ago, then came up with a system that allowed overbuild to the detriment of rural folk.
Well, I don’t blame him to be honest. We know who are to blame – Starmer & Reeves!
“We know who are to blame – Starmer & Reeves!”
And the people that voted them in to office.
The rollout is partially taxpayer funded. They own the assets. They own the tax payer built original network too.
This is a scam.
They had to pay gainsgare on that based on bduk under the original bduk contracts which which was either in the form of payback or great coverage for no more money and it was determined by bduk take up or did that not fit your narrative
Why would any sane company invest in Britain right now? It’s going to get bumpy……
B4RN is classified as a Community Benefit Society, so more resembles a charity than a business, with operational surplesses fed back into the community. Arguably there’s no point in Openreach building out areas served by companies like B4RN, since what’s the point in spending millions to serve a rural location when people will likely go for an entity that feeds any profit back into the community?
Apparently B4RN uses Zayo for backhaul and Zayo is carrying a lot of debt. I’m not sure the economics of companies like B4RN will be sustainable long term, should their backhaul costs climb to unsustainable levels.
I’m also unsure that BT deciding to shy away from serving expensive to serve rural locations, with large distances between properties, would damage BT’s profits; Rural locations are typically low profit/margin and expensive to maintain, Openreach could simply decide to compete more aggressively in the areas covered under the 25 million rollout umbrella; For the rural hard to serve areas they’d just lack the larger range of ISP’s available from the commercial wholesale providers.
There are different options for backhaul. I wouldn’t worry too much about that.
Blaming low take up when FTTC first came on the scene it was marketed as ‘Fibre’ when it wasn’t full fibre any old person around me when I tell them there is Full fibre available in our estate 9 times out of 10 they say they are fine we’ve already got fibre broadband when it’s only FTTC thanks to BTs advertising
I would have thought the bandwidth provded by FTTC, to the average houshold would be more than enough.
Do you think most old people are held back by their fttc connection?
Virgin were branding their heavily copper network as “fibre optic” long before BT was doing FTTC/FTTP.
It turns out that a lot of people don’t care how it is delivered, as long as it works. That is why even Openreach have to impose a stop sell to force ISPs to move to FTTP where available.
Correct, there is still a poster, on the cabinet down the road from me, saying Fibre is here, which they put up when FTTC first came here. It is right in one way, fibre is there and that is where it ended. 🙂 The poster is a bit tatty now.
@Fonz, name made me laugh, anyway, some old people may be held back by FTTC, depends on what they do. What do you call old? A lot of us older people have used computers for years, we were around in the days of dial up and when ADSL first started, we have seen how technology have changed over the years, and it has changed pretty quickly.
When I was a child, we used to listen to music via radio, cassettes or records, I was around 16 when we first heard about the Walkman, this amazing cassette player you could stick in your pocket. Not that I could afford it being a poor student. Now we have something in our pocket, that can play music, watch videos on, make phone calls and lots of other things.
@Dave, FTTC is enough for the majority of people as long as they are close enough to the cabinet to get a decent speed, mine was 36Mb/s, it was ample for 9 years and still is.
What do must people do with their broadband? Maybe stream some video, around 30Mb/s is ample for that, maybe browse a bit on their phone and use social networks, again ample speed on FTTC. Listen to music, yep, again, ample, even Hi-res just about.
Games can be played using FTTC, I know somone who does, just take longer for the games to download.
That is why I was not bothered about changing, FTTC did everything I wanted. Now I have changed to FTTP, I do find the extra speed useful sometimes, but for the most part, it makes no difference. Price got me to change, not speed.
As an older person, not old, fttc has held back it activities considerably. As for what is fibre, I had to point it out during discussions and presentations to middle aged people, Dankshire town and country councils the difference. BT aren’t the only culprits in the arena for miss selling, Ofcom is. As for speeds, prior to the improved address based speed, one wonders how many folk were disappointed when they moved to their new property, to find they were on sub-standard speeds.
@Fastman, I see you are going through the feed trying to make excuses
What is gainsgare?
The statement you make has no relevance to the comment. Unless they paid back a vary large amount. Did they? Can you back up with verified figures?
Did that also apply to the other schemes out there and can you back up with verified data there too?
He means Gainshare. The government originally through BDUK advanced money to BT to roll out FTTC (about £2 billion if I remember correctly), BT were dragging their feet saying that there wouldn’t be enough take up and the deal being that if take up exceeded a certain take up level BT would have to start paying it back and yes eventually most of the money was repaid.
@BigDave in other words, Bl got free capital from the taxpayer.
And now, where there’s only copper the remaining ISPs who’ll provide (not many) find themselves paying an Ofcom-permitted surcharge to help fund the fibre rollout that may or may not happen.
BT are taking us for fools.
In hindsight wouldnt it have been better to let a nationalised Post Office Telephones provide the fibre network nationally.
BT’s money, BT’s choice. As the UK’s flag carrier, I can’t see them stopping build, it’s just about whether they maintain the pace.
good know one wants BT, its old and crap we already have a fibre network just buy youfibre.com
Who are soon to be sold to vm02
I’ll be retired for at least 10 years before I see FTTP where I live.
I don’t see any alternatives any time soon to BT except Starlink.
The reality is that most people today have more than enough bandwidth over FTTC on their super fast connections.
Even though other countries were ahead in their full fibre roll out BT saw no need to rush to deliver a full fibre deployment.
They were forced to by the market, alt nets coming in and doing it.
But now all the money is drying up. Interest rates went up and Investors are waking up to the fact that there is low fibre take up and it will take a very very long time to get their money back. In the meantime alt nets are at risk of going bust.
BT has amassed a colossal pile of debt deploying FTTP and what is the return on that?
Someone needs to put forward a rational case on why they should continue at pace to connect every premise rather than doing it at a slower pace.
And everyone could start with looking at actual data rates over their broadband connection.
The most taxing use case in the home by a country mile is ultra HD 4k streaming and that only needs 25mbs.
How many people actually need full fibre today if the majority of people already have a decent FTTC connection.
I’m not saying that we should be rolling out full fibre, I’m saying that throwing money at it, the contractors, the vendors, etc. in order to do it at pace doesn’t have a solid rational at this time. If people desperately needed full fibre there would be a far higher take up rate.
For most, they would be far better off in upgrading and investing in a decent whole house WiFi setup than the connection itself.
AFAICS the (rural) AltNets will and are ‘Cherrypicking’. The family home and it’s 4 neighbours are regarded as to expensive and difficult for Gigaclear to connect to. As is other outlying parts of the village.
On the same day that BT and EE announce they have a deal with Starlink to provide rural broadband. I’m not sure how it will work given that this is on the retail arm of the company and won’t allow wholesale access to ISPs, I do wonder if this is part of the strategy which could save BT Group a lot in investment costs. It would also mean if they plan to avoid extended the FTTP build to 2030. Those planned staff reductions which they’ve said will mostly come from the natural wastage of staff as the FTTP build comes to an end in 2030, can come in a lot sooner
Usual rants about anything BT
It is a long time ago now that the UK Government denationalised BT, introduced competition and subsequent decisions have followed on the same theme.
We have now have multiple networks at lower efficiency instead of one optimised network.
We have lost any concept of a universal service where the towns and cities subsidising very rural.
Fibre and kit will continue to reduce/improve but install costs will only increase. These properties will require subsidy from the tax payer either directly or indirectly.
Its all resulted with a lottery of what broadband services are available to our premise and its ongoing cost.
BT is a private company and neither they or the Alnets have any obligation (except for some BDUK contracts) to supply Fibre Broadband. So get over it OR are not going everywhere.
Thank you successive UK Governments you have created an uncoordinated mess.
Why should the government continue funnelling taxpayer subsidy into Openreach or other altnets insisting on fibre, the most costly and infrastructure-heavy solution for the final few percent of premises? Multi-gigabit FWA is already a reality and satellite speeds improving rapidly too. Yet these companies want the public to underwrite their outdated, over-engineered rollout plans. It’s hard to see this as anything other than a wasteful subsidy propping up outdated business models rather than delivering practical, cost-effective connectivity for rural areas using fit-for-purpose technology options.