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UK ISP BT Tops 9 Million Broadband Users, 4.1M on Superfast Fibre FTTC

Thursday, May 5th, 2016 (8:47 am) - Score 2,290
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BT has released its latest Q1 2016 results (calendar), which reveals that their retail division has a total of 9,041,000 broadband subscribers (up by +1.045 million in Q1 vs +130K in Q4 2015) and 4.076m of those are taking their FTTC/P based BTInfinity superfast broadband service (up by +214k vs +250K at the end of 2015).

The main events for BT Group during the first quarter were the completion of their £12.5bn merger with EE and the outcome of Ofcom’s Strategic Review, which has tentatively proposed NOT to split BT from control of their Openreach network access division (provided they reach a voluntary agreement). But Ofcom has still proposed significantly more separation between the two, plus they’re also working to make BT’s national UK network of fibre optic lines and cable ducts more accessible for rivals (here and here); all of this is the subject of an on-going and heated discussion.

Otherwise we’ll begin with a brief explanation of BT’s primary divisions for the uninitiated. Firstly, BT Consumer is their retail facing division that sells broadband, mobile, phone and TV packages directly to consumers, while BT Business and Public Sector does the non-domestic market.

After that Openreach (BTOpenreach) sells connectivity services to ISPs on a “functionally separate” basis from BT, while BT Wholesale and Ventures separately sells BT’s own internal twist on their connectivity and MVNO mobile (EE) products to other providers.

BT Consumer / Retail

Unsurprisingly the operator’s consumer division remains the largest broadband ISP in the UK (Sky Broadband comes second with 5.94 million subscribers) and they also tend to grab the lion’s share of new “fibre broadband” customers (we split this out below), which are predominantly FTTC subscribers and a few FTTP. Check below for a summary of subscriber changes over the past two quarters.

Broadband Subs TV Subs Mobile Subs Fibre Subs
Q1 2016 9,041,000 1,463,000 30,445,000 4,076,000
Subs Change (Q1 2016) +1,045,000 +66,000 -147,000 +214,000
Q4 2015 7,996,000 1,397,000 300,000 3,689,000
Subs Change (Q4 2015) +130,000 +97,000 no data +250,000

The huge quarterly growth in broadband subscribers has of course come from EE’s Home Broadband base of just under 1 million subscribers, which is being absorbed into the fold. Indeed it’s notable that without EE the BT Consumer division alone would have only added +105,000 net broadband adds, which is down on the +130,000 added in the previous quarter.

On the flip side BT reported total Mobile subscribers of 30.445 million, which is of course including EE’s massive customer base into the equation. If we were to exclude EE then BTMobile alone would account for just over 400,000 subscribers.

Openreach & Wholesale

The results for Openreach are arguably more useful as they allow us to see wider trends in the market, at least in reflect of BT’s national UK telecoms network and those independent ISPs that buy services over it (note: the total broadband lines and fibre lines listed below include those from BT Consumer, as well as many other ISPs that buy their lines from Openreach, all combined).

Total UK Broadband Lines
Fully Unbundled MPF Lines
Shared Unbundled SMPF Lines
Fibre Lines (FTTC/P)
Q1 2016 19,927,000 8,921,000 1,059,000 5,907,000
Subs Change (Q1 2016) +130,000 +47,000 -14,000 +415,000
Q4 2015 19,797,000 8,874,000 1,073,000 5,492,000
Subs Change (Q4 2015) +182,000 no data no data +494,000

It’s worth pointing out that unbundled lines are mostly used by ISPs like Sky Broadband and TalkTalk, which have built some of their own kit inside of BT’s network. As such MPF lines are usually more popular because they give ISPs the most control and independence over their services, which is why SMPF has been in a slow decline for some time.

Otherwise it’s clear to see that BTInfinity is still taking the main share of new “fibre” additions, which is reflected in the fact that BT Consumer alone accounted for +214k of the +415k total added in Q1 2016, although rival ISPs are grabbing an increasingly big chunk. On the other hand there’s been a clear drop in fibre growth, which is odd since Q1 is usually a more positive quarter. We should add that Openreach’s FTTC/P network can now reach 86% of UK homes and businesses (25 million+ premises passed).

Separately, BTWholesale continues to operate a total of 906,000 external broadband lines for other ISPs, which has fallen by -8,000 in Q1 2016 after showing a drop of -6,000 in the final quarter of 2015.

Gavin Patterson, CEO of BT Group, said:

“This has been a landmark year for BT. We’ve completed our acquisition of EE, the UK’s best 4G mobile network provider, we’ve passed more than 25m premises with fibre and we’ve also delivered a strong financial performance. We’ve met our outlook with our main revenue4 measure up 2.0%, the best performance for more than seven years. Our profit before tax was up a healthy 9%.

Customers want to be online wherever they are and we will be there for them. Our multi-billion pound investment plans will see both fibre and 4G reach 95% of the UK and we won’t stop there. The UK is a digital leader and our investment in ultrafast broadband will help it stay ahead.

Customers are benefiting from our investments but we plan to do more when it comes to service, to meet customers’ rising expectations. That’s why Openreach is tackling missed appointments, why BT Consumer will be upgrading service levels to next day repair and why we’ve hired 900 engineers. We’ve also recruited more than 900 extra contact centre staff. This will enable us to return EE and BT Consumer contact centre work to the UK.

Our strong overall performance for the year is reflected in our full year dividend, which is up 13%. Our results and the investments we’re making position us well to continue to grow in the coming years. In light of our confidence we are setting out financial and dividend guidance for the next two years.”

Going forwards BT will have an awful lot on its mind, not least with their fight to get the best agreement out of Ofcom’s Strategic Review and the tediously long process of merging EE’s business into the wider group. Furthermore they’re about to launch a major summer pilot of the new 330-500Mbps capable G.fast technology, which will cover 25,000 premises in Cambridgeshire and Kent (here); not to mention their various 1Gbps FTTP trials and today’s big commitment to deploy 2 million FTTP lines by 2020.

The G.fast pilot is currently intended to be followed by a full commercial roll-out, which will begin next summer 2017 (here). As part of that BT has pledged to make the new service available to 10 million homes and businesses by 2020, with “most of the UK” being covered by 2025. At first G.fast will only offer speeds of up to 330Mbps (50Mbps upload), but this will eventually rise to 500Mbps.

The other deployment that BT are actively examining is one that would involve catering for the Government’s plan to introduce a new 10Mbps Universal Service Obligation (USO) and they appear to be tapping technologies like Long Reach VDSL (FTTC) to help cater for that (here). But the USO plan is still very much subject to the Government’s on-going future strategy debate.

Elsewhere BT Group reported that it has deferred £229m of grant income due to strong levels of take-up in Broadband Delivery UK areas, which is money (clawback / gain share) that can be sent back to local authorities for reinvestment into the further expansion of “fibre broadband” (FTTC/P) coverage. BT has also increased its base-case assumption for take-up in BDUK areas a second time, pushing it from 30% to 33%.

Finally, on the financial front, BT Group’s quarterly revenue reached £5,656m (up from £4,594m last quarter) and their reported profits before tax over the same period jumped to £893m (up from £862m). Meanwhile their total net debt leapt from £5,021m to £9,845m and that’s largely due to the impact of their merger with EE.

We also note that BTWholesale saw its quarterly operating profit rise from £85m in Q4 2015 to £91m in Q1 2016 and BTOpenreach delivered a figure of £382m for the same thing, which is up from £359m in the previous quarter. We also note that Openreach reported a quarterly capital expenditure of £376m, which is up from £321m in Q4 2015 (calendar).

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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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9 Responses
  1. Avatar FibreFred

    That’s a large increase in q1, sky’s loss BT’s gain?

  2. Avatar MikeW

    The re-adjustment of the take-up prediction for BDUK is interesting – the second one within the financial year. And, where previously we’d talked about there being £129m of clawback available, the cumulative total now seems to be £258m.

    Previously, BT had predicted that reinvestment of the clawback would help reach 96% coverage, this suggests they could end up making inroads into the 97th percent.

    It certainly plays into the position that BT are taking: that they could voluntarily commit to a 10Mbps USC.

  3. Avatar David

    EE’s numbers haven’t been combined with BT consumer, they are two separate brands under BT Group

    • Avatar FibreFred

      That’s what I wasn’t sure about, who is correct?

    • Avatar FibreFred

      They must be combined as mark says as I doubt they got 30 million mobile subs in a quarter 🙂

    • The official KPIs give BT a total mobile base of 30,445,000 and the comment attached to their results says, “Base comprises EE and BT branded mobile.”

      EE is a separate brand within BT, but for the totals BT’s data doesn’t use any division name.. the KPI just calls it all “Mobile”. Obviously we will take the combined figure as that is most relevant, but we also broke it down between BT and EE in our summary.

    • Avatar FibreFred

      Thanks

    • Avatar MikeW

      There are other places where the distinction between the “EE Brand” and the “BT brand” may be felt.

      One item I noticed was when the results were discussing the (net) number of fibre additions. Ordinarily, you’d expect the number reported by Openreach to match the sum of the “BT fibre additions” and the “Non-BT fibre additions” – but in some places, this didn’t quite tally.

      As best I could figure, the “EE fibre” count is sometimes reported separately from the rest of BT (which generally includes Plusnet), and sometimes doesn’t.

      Numbers:
      – Openreach = +415k
      – Other CPs = +199k
      – BT Consumer = +204k
      – EE = +10k

      I note that Mark publishes a figure of +214k for BT-Consumer, which appears to be the figure for Consumer and EE combined.

      There is no explicit figure given for business use of fibre products; the numbers above suggest the business increase might be +2k.

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