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BT Reach 7.8M Broadband Customers and 80 Percent UK Fibre FTTC Cover

Thursday, Jul 30th, 2015 (7:53 am) - Score 1,444

BT has released the latest results for Q2-2015 (calendar) and confirmed that their retail business added +85K new broadband subscribers in the quarter (down sharply from +121K in Q1) to total 7,798,000, which includes 3,226,000 on BTInfinityfibre broadband” (up by +217K vs +266K in Q1). Incidentally FTTC/P is now available to 23 million premises (80% of the UK).

The results for Q2 are sharply lower than we’ve come to expect from BT, but a large part of that is probably as a result of the usual end-of-term student movements and this tends to afflict ISPs like BT and Virgin Media more than most (it usually improves again in Q3). Otherwise it’s been a very busy period for BT.

Over the past few months the operator has rejigged their BTSport TV content with a new +£5 add-on for EU football (here), added one of the first 4K UltraHD TV channels (here), given early hints of an IPv6 trial (here), begun a battle over the future of their Openreach division (here), seen Ofcom propose to give rivals access to their Dark Fibre (here), touted the start of their G.fast broadband trials (here) and moved to speed up the merger with EE (here).. among other things.

Elsewhere BT’s Openreach division, which also provides services to other ISPs on the operators national network (e.g. Sky Broadband and TalkTalk), has so far connected 4,582,000 FTTC/P “Fibre Broadband” subscribers and that’s up by +389,000 in the quarter (lower than the +455k added in Q1). As usual BTInfinity’s own consumer subscribers account for the lion’s share (see first paragraph).

This brings the total number of homes and businesses connected to their FTTC/P network to around 4.6 million or 20% of those passed, which BT says “means we have now achieved our original fibre business case take-up assumption“. As a result BT has increased their “base-case assumption to 28% penetration, with 30% in Broadband Delivery UK (BDUK) areas“, but they added that it would “still be many years before we recover our investment“. BT also includes some costs for this.

BT Group’s Capital Expenditure

Capital expenditure was £658m (Q1 2014/15: £516m) after £3m (Q1 2014/15: £78m) of net grant funding mainly relating to the BDUK programme. This reflected £103m of gross grant funding directly related to our fibre broadband network build in the quarter which was largely offset by the deferral of £100m of the total grant funding we have accrued to date.

This is primarily because we have increased our base-case assumption for take-up and under the terms of the BDUK programme, we have a potential obligation to either re-invest or repay grant funding depending on factors including the level of customer take-up achieved.

The deferral accounts for most of the increase in our capital expenditure but is a non-cash item in the quarter that we expect to be reflected in our free cash flow in future financial years. Without the impact of the deferral, our capital expenditure would have been £558m. To date, we have deferred a total of £129m of grant funding.

Elsewhere Openreach reported that their total active UK broadband lines topped 19,455,000 (up by +149K compared with +248K in Q1 2015), which also includes 8,688,000 fully unbundled (MPF LLU) and 1,128,000 shared unbundled (SMPF LLU) lines as used by other non-BT based ISPs. Rival ISPs tend to prefer the extra control of MPF lines to SMPF and thus the latter has continued a steady decline.

Separately BTWholesale continues to run a total of 1,841,000 external broadband lines for other ISPs, which is up by +9K in the quarter after showing a sharp -42K decline in Q1.

Gavin Patterson, BT Group’s CEO, said:

This is an exciting time at BT. We continue to invest heavily in our superfast fibre broadband network. It now reaches around 80% of all UK premises and we will work with government to help take fibre broadband to 95% of the country by the end of 2017. Our technical trials of ultrafast broadband using G.fast are progressing well; we’re on target to start large-scale customer trials this summer.

Our mobile plans have got off to a good start with more than 100,000 consumer mobile customers signed up in the first three months. We’re also looking forward to completing our acquisition of EE, which will allow us to create a true UK digital champion, providing customers with greater choice and value and helping to deliver the UK’s connected future.

We’re launching BT Sport Europe in the next few days, the new home of UEFA Champions League football, which is free for our BT TV customers. We are also leading the way on Ultra HD TV. Our BT Sport Ultra HD channel will be the first live sports channel in Europe offering picture quality four times that of normal high definition.

We have also invested further in improving customer service and Openreach is running ahead of all 60 minimum service levels set by Ofcom for this year. And we are engaging with Ofcom as part of its Strategic Review of Digital Communications which offers scope for deregulation and the potential to create a more level playing field in pay-tv.”

In financial terms, BTWholesale produced a quarterly operating profit of £82m, which is down on the £121m of the previous quarter, albeit better than the £79m in Q4 2014. By comparison BTOpenreach produced a Q2 operating profit of £304m, which is down from £366m in Q1 and £319m in Q4 2014.

Overall BT Group’s quarterly revenue reached £4,278m (down from £4,639m in Q1 £4,475m in Q4 2014) and their reported profits before tax fell to £632m (down sharply from £842m in Q1). Meanwhile total net debt for the group stands at £5,819m, which is up sharply from £5,119m in the previous quarter. Ouch.

Mark-Jackson
By Mark Jackson
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 and .
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