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BT Top 7.88M Internet Subs as Fibre Broadband Covers 24M UK Premises

Thursday, October 29th, 2015 (7:59 am) - Score 1,225

BT has posted their latest Q3-2015 results (calendar), which reveals that their retail business now has a total of 7,879,000 broadband subscribers (up by +82K vs +83K in Q2) and 3,438,000 of those are taking their FTTC dominated BTInfinityfibre broadband” (up by +212K in Q3 vs +217K in Q2).

The operator’s business is split into several divisions, one that serves end-users with BT’s own retail products (BT Consumer), another that manages the underlying UK telecoms network and sells related services to ISPs on a “functionally separate” basis from BT (Openreach) and one that sells BT’s own twist on their products to other ISPs (BT Wholesale).

At this point we normally expect BT’s own retail subscriber figures to be stronger in Q3 than Q2 because the second quarter tends to suffer due to a mix of holiday periods and students returning home for the summer (cancelled contracts). As such it’s a little surprising to see flat growth for the latest quarter, although the recent price hikes might be playing a part (here).

It’s also interesting to contrast the BT Consumer results with those from Openreach, which reflects uptake across the wider market (excluding Virgin Media and smaller alternative network providers).

Openreach reported that their total active UK broadband lines have now topped 19,615,000 (up by +160k in Q3 vs +149K in Q2 and +248K in Q1 2015), which includes 8,798,000 fully unbundled (MPF LLU) and 1,091,000 shared unbundled (SMPF LLU) lines as used by other ISPs (e.g. TalkTalk and Sky Broadband). BT’s rival ISPs tend to prefer the extra control and independence of MPF lines.

Elsewhere Openreach also reported that some 4,997,000 subscribers had now taken an FTTC/P “fibre broadband” service out of more than 24 million premises passed (more than 80% UK coverage), which is an increase of +415,000 subscribers in Q3 (up from the +389k in Q2 and down on the +455k added in Q1). BTInfinity’s own subscribers still dominate the total, but rivals are having a growing impact.

Separately BTWholesale continues to operate a total of 1,847,000 external broadband lines for other ISPs, which is up by just +5,000 in the quarter after showing another small increase of +11k in Q2 (during Q1 they saw a sudden shock decline of -42K).

Gavin Patterson, BT Group’s CEO, said:

We’ve delivered a good financial performance with revenue up 2% this quarter.

Fibre broadband is a success story and we continue to invest heavily to help the UK remain a broadband leader among major European nations. Our open access fibre network now passes 24 million premises and we are not stopping there. We want to get fibre broadband to as many people as possible and we are also pushing ahead with our plans to get ultrafast broadband to ten million premises by the end of 2020. Market-wide demand for fibre remains strong with fibre net additions up 21% as we hit the five million milestone for homes and businesses connected.

We’ve seen good demand for BT Sport Europe and this has helped us add a record number of BT TV customers in the quarter. Its contribution has been better than we expected, helping drive a 7% increase in BT Consumer revenue. Mobile is another growth area and I am pleased our consumer customer base now stands at more than 200,000. And I am also pleased that yesterday, the Competition and Markets Authority provisionally approved our planned acquisition of EE, unconditionally without remedies.

We are making step changes to improve customer service, as part of our group-wide programme. Openreach’s recently launched ‘View my Engineer’ service is going down well. The 3,000 engineers we hired in the last 18 months are helping us fix faults faster and provide new services sooner. We have also created more than 1,000 new contact centre jobs in the UK, with hundreds more to come, to meet our 2016 commitment for more than 80% of consumer customer calls to be answered in the UK. And we have plans to go even further in years to come.”

Despite all this BT’s future after Q3 is still uncertain, not least because Ofcom are considering whether or not to completely separate the Openreach division (here) and then there’s the not insignificant matter of those proposals to give rivals more access to BT’s Dark Fibre network (here). On the flip side that £12.5bn merged with mobile giant EE looks set to go ahead (here).

BT has also attempted to combat Ofcom’s review with promises of a minimum 5-10Mbps universal UK broadband speed (USO) and a pledge to invest in ultrafast G.fast connectivity (here), but the outcome is as yet uncertain. A divorce of Openreach from BT could be a very long and difficult process, which is also making the Government sceptical (here) and that may count in their favour.

In the meantime we’ll pause for thought by taking a quick look at BT Group’s financials. Overall BT Group’s quarterly revenue reached £4,381m (up from £4,278m in Q2) and their reported profits before tax increased to £642m (up from £632m in Q1, but down sharply from £842m in Q1). Meanwhile total net debt for the group grew again to hit £5,919m, which is up from £5,819m in the previous quarter.

Finally, BTWholesale produced a quarterly operating profit of £72m, which is down on the £82m recorded for Q2 and the £121m for Q1. By comparison BTOpenreach produced a Q3 operating profit of £318m, which is up from £304m in Q2 but still down from £366m in Q1. It’s worth pointing out that Openreach’s quarterly capital expenditure has tended to hover just below the £300m mark, although Q3 saw a figure of £348m and Q2 before that had £402m.

As a side note, BT Consumer has now added 106,000 BT TV customers in Q3 (up from +60K in Q2) and that took their total customer base to 1.308 million. The operator also has more than 200,000 mobile subscribers.

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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 Twitter, , Facebook and Linkedin.
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40 Responses
  1. Avatar chris says:

    It isn’t fibre broadband if it comes down a phone line.

    1. Mark Jackson Mark Jackson says:

      Hence why we use speech-marks in the article, although I can’t always fit them into the news title.

    2. Avatar GNewton says:

      “VDSL” or “hybrid fibre” instead of “fibre broadband” would have easily fitted into the headline.

    3. Avatar Gadget says:

      An increase in connection speed by any name (be it glass, copper or ether) would smell as sweet [apologies Will!]

    4. Avatar FibreFred says:

      Its a sales term (not a technical definition) the public is used to… so… why not use it?

    5. Mark Jackson Mark Jackson says:

      Most ISPs don’t sell the product as VDSL or hybrid fibre, thus the bulk of normal folk won’t know what it means, but will be familiar with “fibre broadband” as per the wider marketing.

      Meanwhile we trust that the more technically competent folk will already know the difference, without us having to explain in every article.

    6. Avatar MikeW says:

      Given what the term “broadband” meant with reference to a copper phone line, is it right to ever apply the term “broadband” to full fibre?

      Surely the passage of data across the fibre is entirely within band.


    7. Mark Jackson Mark Jackson says:

      Oh no you don’t.. we’ll be discussing that one for the next 1,000 comment posts :). I’m out.

    8. Avatar MikeW says:

      Lol, but a good point, Mark.

      Such a set of comments would be as useful as the ones that always happen as a result of the OP in this thread.

    9. Avatar Ignition says:

      This is both a new and exciting comment and discussion point.

    10. Avatar Swadesh says:

      Clearly there’s an urgent need for Chris here to be appointed to Ofcom to clarify these important terminological matters. However I would like to take this moment to clarify that the copper part of VDSL doesn’t have to be a phone line!

    11. Avatar GNewton says:

      “However I would like to take this moment to clarify that the copper part of VDSL doesn’t have to be a phone line!”

      While true, only very few ISPs offer VDSL services without the voice telephony part, that is, naked VDSL. We know from experience that to many BT engineers installing a naked VDSL line is still a novelty. And you won’t save much money either, at least not with ISPs like AAISP who does naked VDSL.

    12. Avatar FibreFred says:

      “While true”

      So… stop there. No need for anymore

    13. Avatar Swadesh says:

      That whooshing sound you heard over your head was called humour.

  2. Avatar liveinhope says:

    Is ‘Standard Broadband’ not ‘Fibre’?

    1. Avatar MikeW says:

      Another 9% or so, and you might well be right.

  3. Avatar Steve Jones says:

    I think for those expecting that a separated OR would be able to finance a sudden increase in investment ought to look at these figures. It’s rougly a £5bn a year business with flat income (essentially due to regulation of both prices and what it can do). The only revenue growth area is GEA/FTTC, but that’s offset by regulatory action in other areas. It’s about 55% of BT capex and 29% of revenue. Capex is broadly similar to depreciation which is what you’d expect in a business with flat revenue base (as capex turns into depreciation and drives up costs).

    In the past year BT had to make a pension deficit contribution of £625m. That’s a pretty substantial drain on cash and it’s neither the first or last that will be required. One of the more interesting questions for those working out the details of any separation is how that deficit is going to be split. If it’s done by previous workforce patterns, OR will pick up a disproportionate share.

    Ofcom do not allow historic pension deficits to be included in the costs for regulated pricing (which is different to the practice in most other privatised utilities who have similar issues).

    It really is difficult to see how a separated OR would have significantly more funds to invest given its prospects for revenue growth are poor to non-existent due to regulatory constraints. That’s unless Ofcom chose to regulate things differently.

    1. Avatar FibreFred says:

      I think there is some thinking that investment will come from others like Sky and TalkTalk, although TalkTalk might not have much spare cash over the next few years after the events of last week…..

    2. Avatar fastman says:

      anyone who thinks at a separate Openreach not part of the Bt group would invest more than it it does as being part of the BT Group is badly misinformed or has their own specific agenda – for the reasons you state above

    3. Avatar Steve Jones says:

      In what form would an investment come from Sky or TalkTalk? Equity? The existing shareholders might be concerned about the dilution of their shareholding unless somehow this investment turns into increased revenue. The only way their would be increased revenue would be if TT & Sky somehow committed to buying higher value products from OR (maybe FTTP) in some volume.

      If course if they did that then OR wouldn’t have trouble raising finance itself.

      It can’t be repeated often enough. The issue isn’t capital expenditure as such, it’s coming up with the business case with a reasonable chance of a return. Equity investment in OR doesn’t change that one bit.

      Then there’s the issue of how much. Large scale FTTP is in the many billions and TT certainly don’t have that sort of money and Sky has big calls on its cash in buying TV & Sports rights. Vodafone have a great deal more cash of course, but I think they would want much more control. They tried to do a deal to buy VM; not put in some equity investment.

    4. Avatar FibreFred says:

      No idea Steve just taking that from one of Dido s speeches the other week.

      No doubt just hot air

    5. Avatar GNewton says:

      @SteveJones: “BT had to make a pension deficit contribution of £625m”

      Tell that the telecom customers, they won’t have any sympathy for this situation if BT came up with the excuse that it can’t provide adequate telecom solutions because of that. An independent Openreach should not be forced to take a disproportionate share in this pension share. This is really something where a past government has failed to come with an adequate solution when privatising BT, and now the innocent consumers have to pay the price.

    6. Avatar AndyH says:

      So because BT do not provide nationwide FTTP coverage, their telecoms’ solutions are inadequate?

      What adequate pension solution do you propose for BT or an independent OR?

    7. Avatar Steve Jones says:


      Firstly, it would not be disproportionate. It would simply reflect the past workforce who overwhelmingly worked on telephone systems, in exchanges and so on. Outfits like global services didn’t exist and there wasn’t much in the way of business services.

      It also doesn’t matter two hoots what you or I would want. It would be settled by a mixture of accountants and lawyers. These are contractual issues between the company and pension trustees. Ultimately OR (and any other successor companies) are liable for the deficit, even to the point of insolvency.

    8. Avatar GNewton says:

      @AndyH: “So because BT do not provide nationwide FTTP coverage, their telecoms’ solutions are inadequate?”

      The kind of an adequate service depends on each individual customer, private or business. Each one has different needs.

      However, what’s not acceptable is that a telecom company isn’t able to deliver ordered services in a timely manner, and or the lack of proper customer services (see e.g. BT’s own business forum at https://business.forums.bt.com/t5/Feedback-general-chat/bd-p/Intros to get an idea). And the provision of telecom services (fibre, wireless, VDSL, ADSL etc) should be subject to a postcode lottery.

      The BT mess (partly the fault of previous and current governments, BT, and the BDUK) needs to be sorted out, one way or the other.

      @SteveJones: “Ultimately OR (and any other successor companies) are liable for the deficit, even to the point of insolvency.”

      Isn’t BT, not Openreach, liable for the pension burden? Under what rules does an independent Openreach has to take a much bigger share of this compared to the other parts of BT? Also, what’s wrong with an insolvency if the company can’t stand on its legs? This would be a good wakeup call for this country, to sort out the telecom mess, to promote more investments, remove red tapes, copy the examples of other more successful countries like Sweden etc.

    9. Avatar GNewton says:

      Correction: My sentence should have read:

      “And the provision of telecom services (fibre, wireless, VDSL, ADSL etc) should NOT be subject to a postcode lottery.”

    10. Avatar FibreFred says:

      You still don’t get it GNewton, the Openreach pension burden is mostly Openreaches, as has been said numerous times most of these other BT divisions didn’t even exist when it was privatised.

      Back then the organization was mostly all (equivalent of todays) Openreach staff, people that worked in exchanges, engineers etc etc. Why would say…. Global Services or BT T&SO for example which didn’t exist back then take on some of that burden, they have nothing to do with that area at all.

      Sometimes I’m not sure if you just don’t understand these things, be it technical or commercial or whether you are just trying to spin out some argument/troll.

    11. Avatar GNewton says:

      @FibreFred: Back to your usual insulting other posters here again?

    12. Avatar FibreFred says:

      I’m not insulting you I am asking a valid question is it a genuine lack of understanding or trolling some people on here (not talking about you) just comment to troll

    13. Avatar Swadesh says:

      “Isn’t BT, not Openreach, liable for the pension burden?” is a meaningless sentence because Openreach is a subset of BT and as such cannot be liable for a collective responsibility any more than any other subset. It has been explained to you that a proportionate (the original poster’s use of disproportionate is a misnomer) share of the pension deficit for an independent Openreach would be a very large share and as such would be a drain on cash.

      With regards to the “postcode lottery” I don’t think you could find anyone who would disagree with you there. But in practical terms what are you suggesting? BT is a private company with a legal responsibility to shareholders so it would be illegal to take deliberately unprofitable actions for “the common good”. That’s why national and local government subsidies are important. Perhaps there needs to be more government subsidies to BT or BT (or an independant Openreach) needs to be a nationalised company with a remit of building FTTx nationwide. In any case BT’s hands are tied on the matter.

    14. Avatar GNewton says:

      @FibreFred: “I’m not insulting you I am asking a valid question is it a genuine lack of understanding or trolling some people on here (not talking about you) just comment to troll”

      Then stop insulting posters here when they have a different view than yours, or posting questions. Your very sentence like “the Openreach pension burden is mostly Openreaches” shows that you have no comprehension of this issue.

    15. Avatar FibreFred says:

      Many people are telling you that you are wrong (not just me) but you still don’t get it.

      I’m calling it the Openreach pension burden because it is… mostly from that area, are many others have said.

      Your reply to @J1993 shows you still don’t get it

  4. Avatar J1993 says:

    Has someone forgot about us employees? We all have lives to lead and think about our families and children. However the common folk don’t care about us, they forget about the bigger circle of employees, regulations, pensions, structures etc. How dare someone dictate to me or other colleagues of mine without any considerations that the company should go insolvent, that we as people and employees and the effects it will have on our lives and families don’t matter because you can’t get your precious 5mb. Some things are bigger than broadband.

    1. Avatar GNewton says:

      @J1993: I appreciate your concerns. But BT is now a private commercial company, it is not government owned, and as such there are always risks, like with any other company pension schemes. It is my understanding though that the government will still protect the BT pension fund should BT get into financial troubles or fail to fulfil its obligations. Correct me if I am wrong.

    2. Avatar Swadesh says:

      BT is not government owned but it operates under strict regulations that both control its legal responsibilities at one end and and it’s ability to profit from its dominant position at the other. So it’s far from a conventional publicly listed company. As a vary large infrastructure provider (for what is an increasingly essential part of national infrastructure) it’s important to realise that such capital is not mobile and the substantial workforce that backs it up is not easily replaced. People who think that “market forces” are all that’s needed to improve high speed internet rollout in the UK are grossly underinformed.

  5. Avatar fastman says:

    there is a fundamental misconception at play here — there are cira 25,000 + in Openreach give or take , the significant of the will be long standing service significantly in in excess of 25-30 years and greater that and are know as either 801/802 these are all covered by the crown guarantee so there would be significant risk from a pension scenario for a spun off Openreach that is a 5bn business and get paid XX per line whether its fibre or copper — it provides infrastructure and that only and people think there would be more investment in a spun off Openreach than now — you couldn’t make it up

    1. Avatar GNewton says:

      @fastman: Openreach is not the successor of the former government-owned BT or GPO. BT’s pension obligation is derived from two pension plans: BTPS, the company’s defined-benefit pension scheme which was closed in 2001. And then there is the BT Retirement Saving Scheme (BTRSS), which was set up to replace the BTPS and is a defined-contribution retirement plan.

      As of yet, nobody has answered my simple question: What are the exact rules for splitting up the pension schemes if Openreach became an independent company. Would have an independent Openreach a higher pension burden if it was owned by BT anymore?

      As regards what posters said about an independent Openreach investing more: This will not necessarily be the case, at least not initially. However, it will then be forced to act as an infrastructure company, as a business, and not as an incompetent lazy entity relying too much on BT Group to keep it alive, or on public subsidies to serve certain areas. And it will eventually have to invest in new replacement infrastructure in order to survive longterm. Or it could take new investors onboard

      Splitting up large, near-monopolistic companies into smaller entities is nothing new, there are good reasons to prevent too powerful companies from distorting natural markets and from preventing innovations.

    2. Avatar Steve Jones says:


      That’s a complete misconception about the Crown guarantee. It only protects the pensioners and not the company. For that to come into operation the company (or its successor companies) will have to go bankrupt. I’m pretty sure the government won’t welcome that as they picked up an £8bn deficit on the Royal Mail pension scheme.


      being forced to act as an independent infrastructure company makes not one jot of difference to the ability to finance investment. It’s either commercial, or it isn’t, and if it’s the latter then there will simply be no finance made available. Yes, it may be possible to squeeze costs a bit more (which has been going on for years), but Ofcom expect OR to run as fast as possible in that direction just to stay still. Pretty well all OR’s products, with the (current) exception of the GEA ones are all closely price regulated using a cost based model. Ofcom have used what’s called “regulatory forbearance” on setting the actual wholesale price of GEA/FTTC & GEA/FTTP, but that is strictly time limited. At some point in the future Ofcom will set the actual wholesale price as they do for MPF, WLR and the ethernet leased circuit wholesale products. Unless Ofcom change their regulatory model there simply is not prospect of an increase in revenue to facilitate a substantial increase investment.

  6. Avatar fastman says:

    Gnewton you have completely ignored the facts on this if you are a Section A or B and an EIN of 801/802 you joined prior to 1986 so you are covered by the crown Guarantee — so there is a imbalance of people who are section A and B in openreach signifantly more that the rest of the business – FYI is a 5Bn only infrastructure business which needs anchor Tenants ISP to see its products to — otherwise you end up with digital region — so you think more innovation with no anchor tenant is a good thing — and you think that will increase innovation

  7. Avatar fastman says:

    FYI so there are 530 + service providers and out of those 530 circa 100 of those consume FTTC and the rest only copper and out of those 100 that ccnsume FTTC only around 4 of them consume FTTP !!!

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