BT Tops 7.47m Broadband ISP Customers as FTTC Covers 21m UK Premises

National UK telecoms giant BT has today posted their latest results for Q3-2014 (calendar), which reported slowing retail broadband growth to total 7,473,000 customers (up by +88k versus the +104k added in Q2 and +170k in Q1). The operator also revealed that their superfast capable “fibre broadband” (FTTC/P) network could now reach 21 million homes and businesses (premises passed).

Ordinarily we tend to see ISPs gain an uptick in broadband subscriber growth during Q3, which is often thanks to students as they return to their education and take out new contracts, although BT seems not to have benefitted. The aggressive price competition from Sky Broadband, Virgin Media and TalkTalk can’t be helping.

Similarly BT’s Consumer division also saw their base of predominantly ‘up to’ 40-80Mbps capable superfast Fibre-to-the-Cabinet (BTInfinity) subscribers grow by +203,000 in the quarter to total 2,535,000, which is down from the +226k added in Q2 and well below their peak of +249k additions in Q1. Sadly BT never splits out uptake data for their 330Mbps FTTP products, although this only represents a tiny minority due to limited coverage.

At this point it’s worth looking at ISPs across the market, specifically those that also make use of BTOpenreach’s national UK telecoms network to help deliver their own FTTC and some FTTP “fibre broadband” services (e.g. Sky Broadband, TalkTalk, BT, Zen Internet etc.). Overall Openreach added +344,000 new FTTC/P customers in Q3 to total 3,363,000 and that’s actually a small increase from +341k in Q2, which suggests that the fibre slowdown at BT’s consumer division is not being mirrored elsewhere (around 40% of Openreach’s net fibre broadband connections were generated by external ISPs in Q3).

Overall Openreach saw their total UK broadband lines top 18,800,000 (+182k in Q3 vs 163k in Q2 and +217k in Q1), which among other things included 8,180,000 fully unbundled (MPF LLU) lines and 1,288,000 shared unbundled (SMPF LLU) lines; these are predominantly used by Sky Broadband and TalkTalk. BT Wholesale also sold a total of 1,859,000 external broadband lines (-8k in Q3 vs -5k in Q2) to other ISPs (this now excludes the broadband lines that BT’s own consumer division uses – as above).

On the TV front the BT TV / IPTV (YouView + BTVision) service added +38,000 new subscribers to total 1,045,000 in Q3 and that’s well above the +5k added in the previous quarter, although this was because BT removed -35k inactive customers during Q2 (i.e. a result of their earlier decision to exchange legacy set-top-boxes).

Gavin Patterson, BT Group’s CEO, said:

“This was a solid quarter, with results slightly ahead of market expectations as we reduced costs and grew EBITDA. Profit before tax was up 13 per cent.

Our Consumer business continues to perform well thanks to the impact of BT Sport where Premier League audiences are up around 45 per cent on average. Fibre is also driving growth with one in three of our retail broadband customers enjoying super-fast speeds.

Our fibre footprint has increased to more than 21 million premises and will continue to grow. We continue to see strong demand across the market for the faster speeds that fibre offers.

Further improving customer service remains a priority and Openreach is recruiting an additional 500 engineers to help us better serve our customers. We have also launched a range of new cloud-based products and services aimed at the business market.

We are delivering on our strategy and our outlook remains unchanged. Our confidence enables us to raise our interim dividend by 15 per cent to 3.9p.”

On the financial front BT Group’s reported quarterly revenue reached £4,441m and their reported profits before tax topped £563m (up slightly from £546m in Q2). Meanwhile total net debt for the group increased slightly from £7,028m in Q2 to £7,063m now. Separately BTOpenreach reported that their Q3 revenue was down 2% to £1,245m with regulatory price changes having a negative impact of around £45m, the equivalent of 4%.

Otherwise there wasn’t anything particularly new or interesting to report this quarter, with prior G.fast and FTTdp trials getting a brief mention (we’ve already reported extensively on those). Sadly there was no meaningful update on BT’s consumer 4G service either, which is due to arrive during H2-2015.