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BT Raises FTTP Broadband Target to 25 Million UK Premises

Thursday, May 13th, 2021 (7:13 am) - Score 7,176
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The BT Group has published their latest Q4 2020/21 results today, which reveals that Openreach has further expanded their gigabit-capable Fibre-to-the-Premises (FTTP) broadband ISP network rollout target from 20 million UK premises to 25 million by December 2026. The extended target will support an additional 7,000 jobs.

At present Openreach’s gigabit-capable FTTP network is already available to over 4.6 million premises (homes and businesses) across the United Kingdom (here), which previously aimed to cover 20 million at a cost of £12bn by the mid to late 2020s. Some 3.2 million out of that planned build was due to be in rural or semi-rural villages and market towns (here); these are all commercial builds.

NOTE: The operator is currently building FTTP at a rate of c.43,000 premises per week (1.9 million were added during 2020/21).

However, since the operator’s last set of results there have been a number of favourable regulatory decisions for BT via Ofcom’s recent market review (here). Not to mention the Budget 2021 announcement of a “super deduction” tax policy for businesses that invest in new plant and machinery assets (here) and the deployment of faster trenching machines (here).

Suffice to say that the BT Group now feel as if they have the security and confidence to go a bit further and have added an extra 5 million premises to their UK coverage target (c.80% of UK premises), which also seems to push the cost up to £15bn. Openreach will start its build ramp up, reaching a peak of 4m premises a year, with immediate effect (previously they expected to peak with 3 million a year).

BT states that they have the capacity to fund this additional build entirely from internal resources while continuing to stand by their other priorities, including investing in 5G and its modernisation programme, committing to a minimum credit rating of BBB flat, supporting the BT Pension Scheme and reinstating its dividend in the current financial year at 7.7 pence per share.

However, the operator also believes that it “could deliver further shareholder value by funding the additional 5m premises through a joint venture with external parties” and will explore joint venture structures over the first half of the current financial year.

Philip Jansen, CEO of BT Group, said:

“BT is already building more full fibre broadband to homes and businesses than anyone else in the UK. Today we are increasing our FTTP target from 20 million to 25 million homes and businesses to deliver further value to our shareholders and support the Government’s full fibre ambitions.

This has three massive benefits: it allows us to go faster, beefing up our capacity to build fibre to households and businesses; it allows us to go further, getting fibre to more people including in rural communities, and; it will help fuel UK economic recovery, with better connectivity and up to 7,000 new jobs.”

The huge development will come as welcome news for consumers, although alternative network (altnet) providers will no doubt be concerned about the additional competition as it will surely see Openreach pushing FTTP into areas that they had previously seemed set to neglect (i.e. the places where many smaller altnets are currently investing). Equally, Virgin Media’s plan to build out to another 7 million premises may be impacted (here).

Elsewhere BT has today welcomed the Premier League’s in principle agreement for a 3-year renewal of their current broadcast agreement. This means, subject to terms, that until 2025 BT Sport will continue to show 52 exclusively live Premier League games per season. Sky’s existing roster also looks set to be maintained.

BT also announced that it has reduced the carbon emissions intensity of its operations by a further 14% over the last 12 months. An overall reduction of 57% since 2016/17 puts the company on track to reduce its overall carbon emissions by 87% by the end of March 2031.

Summary of Group Results

As usual BT Group have also published their latest quarterly results, which has been quite eventful and this was underlined by the major changes introduced via Ofcom’s latest market review (here and here) and the related price rises at wholesale (here), as well as plans for new full fibre discounts in the future (here).

Meanwhile, Openreach has now largely resumed normal operations after the recent lockdown (here) and is separately having to tackle some FTTP capacity problems with telegraph poles in certain areas (here). The network access provider has also made progress on their future FTTP Advanced product for businesses (here).

On top of that Openreach has confirmed their plans to extend FTTP to another 100,000 premises in Northern Ireland (here). Outside that we’ve also seen EE launch 5G in 35 new locations (here), while BT has launched a new social broadband tariff (here) and is also considering the sale of their TV sport broadcasting business (here).

Overall, the BT Group should be looking toward a more positive future after several rocky years, except for the threat of a major national strike that is now looming over the operator (here and here).

Financial Highlights – BT’s Quarterly Change
* BT Group revenue = £5,286m (down from £5,477m)
* BT Group profit after tax = £196m (down from £420m)
* BT Group total net debt = £17,802m (increased from £17,294m)

BT doesn’t report full customer figures for their own retail broadband ISP, but they have started doing it for their newest services. BT Consumer reported that they had 753,000 FTTP customers (up from 686K last quarter) and EE’s “5G Ready” base now stands at 3.261 million (up from 2.141m). Meanwhile 82.4% of BT’s fixed consumer base now take a “superfast broadband” service (up from 82.3% last quarter – mostly FTTC) and this drops to just 5.5% (up from 4.8%) for their “ultrafast broadband” (100Mbps+) products (G.fast and FTTP).

Openreach’s Network

The table below offers a breakdown of fixed line network coverage and take-up by technology on Openreach’s national UK network, which covers the totals for all ISPs that take their products combined (e.g. BT, Sky Broadband, TalkTalk, Zen Internet, Vodafone etc.).

The roll-out of full fibre lines remains the dominant one amongst the two “ultrafast” technologies, with FTTP adding +560,000 premises (up from +550K last quarter) and hybrid fibre G.fast being unchanged. As most people know, G.fast deployments have been suspended in favour of FTTP.

openreach_q4_2020-21_network_coverage_and_takeup

We normally expect the rapid rollout of any new technology to suppress take-up, but Openreach’s FTTP seems to be bucking this trend a bit. The results reveal that, across all ISPs, some 905,000 FTTP connections have now been made (up from 790k last quarter) and that equates to a take-up of 19.6% (up from 19.51% last quarter) – this is impressive. But when the operator ramps-up their build to meet the new target then this may slide a bit.

 

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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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38 Responses
  1. Ray Woodward says:

    I won’t be holding my breath ..

  2. George Brown says:

    I’m impressed how quickly you get the financial results posted. It’s before Sharecast, HL, and BBC finance news.

  3. Alex says:

    Haters incoming…

    1. Tony says:

      As always.

  4. Aled says:

    If I was being cynical, this is a life or death situation for BT. If the alt-nets/Virgin get a serious foothold on FTTP, BT (and its overwhelming pension fund liabilities) are toast by 2025. They clearly have decided that after a decade of stewing the profit from their copper cable, maybe now is the time to put out lots of noise to discourage the smaller alt-nets from moving in on their rural strongholds.

    Either way, it just shows that competition is the best way to get the best results for consumers. I have to congratulate BT for finally getting the FTTP show on the road (it has been what, 10-15 years of dithering?).

    1. Random says:

      BT tried to roll out nationwide FTTP in the 90s but Thatcher cancelled it in favour of bringing in the US cable companies: https://www.techradar.com/uk/news/world-of-tech/how-the-uk-lost-the-broadband-race-in-1990-1224784

      I’m sure you know how well that worked out.

    2. GNewton says:

      This is a misleading old story. Nobody has prevented BT from doing fibre for well over a decade now. The plain truth is, BT is more ten years too late in the game, and is now desperately trying to catch up.

    3. A_Builder says:

      But the plain truth is that BT have caught up and overtaken the opposition now.

      I will admit that BT did leave it dangerously late and the sounds of Alt Nets eating OR’s lunch were becoming quite loud. Seemingly loud enough to have woken the BT board from its cuprous slumbers: probably induced by watching too much footy…….

      More FTTP is good for UK PLC both business and consumer.

      The fact that it is also good for BT pensioners and shareholders is a multi point win for everyone.

    4. occasionally factual says:

      If BT have been left behind by being too late to the party, can you explain why in the last month alone they have enabled 240k premises for FTTP?
      That is more than one third of the total UK rollout by CityFibre (which is 3 years old and at a total of 600k over that period).

      In just 1 calendar month.

      Doesn’t look like behind left behind to me. Looks very much the opposite.

      (figures from TBB)

    5. occasionally factual says:

      Slight slip of the finger. I should have said 204K in my post.
      But the rest still applies.

    6. Mick says:

      If BT had gone straight to FTTP 10 years ago they would have spent far more than they will now, dig costs were higher then with lower take up in those days of the high speed services that make it pay. We would also have seen a lot more comments in ISPreview from people stranded on ADSL2+ waiting for the much slower FTTP rollout to reach them. FTTC may not be very popular on ISPreview, but it quickly and cheaply lifted the baseline for 95% of the country to a useable level – easy to take for granted when it exists.

    7. GNewton says:

      @A_Builder: I was referring to the techradar story, pointing out that the old Thatcher decision was not the reason for BT for having started widespread fibre deployment more than a decade ago. Though I agree it’s good that they are trying to catch up, though BT won’t be able to compete with most of the altnets where deployed, BTs fibre isn’t symmetric.

    8. GNewton says:

      Correction: “was not the reason for BT for not having started widespread fibre deployment more than a decade ago”

    9. FibreFred says:

      Came looking for the 10yrs too late comment.

      Not disappointed.

    10. FibreFred says:

      BT won’t be able to compete with altnets? OK let’s see how that goes

    11. FibreFred says:

      Mick, exactly that. All of this has been pointed out in the past but fails to land I’m afraid…

    12. John says:

      “though BT won’t be able to compete with most of the altnets where deployed, BTs fibre isn’t symmetric.”

      Lol…

      For starters it’s OpenReach (it gets boring seeing BT used incorrectly over and over).
      You may as well call them the GPO.

      Which Alt-Net do you think OpenReach won’t be able to compete with?

      The largest rival is Virgin who are even more asymmetric than OpenReach.

      The next largest is CityFibre who are using the exact same asymmetric GPON as OpenReach.

      The “fibre” isn’t asymmetric at all.
      The hardware on either end of it currently is, but there are PON technologies that can be literally hot swapped at either end to make it symmetrical.

      Can you even name an Alt-Net with a symmetrical FTTP footprint as big as OpenReach current monthly FTTP rollout pace?

      OpenReach will sell more live asymmetric FTTP connections than every Alt-Net combined can pass properties.

      Even in areas where Alt-Nets have good coverage they have lower take up than OpenReach FTTP.

    13. ChrisC says:

      Comparing openreach to cityfibre.

      Cityfibre seem to be doing a typical commercial rollout, target the cities as you have population density which makes financial sense.

      Openreach rollout seems politically affected, it has higher density in the south east and north west parts of the country, eastern parts of the country north of London have sparse coverage (I mean planned coverage not completed), cities such as Leicester have “no” planned openreach FTTP at all. The coverage is targeting high GDP areas and rural areas.

      If you live in a village that under normal circumstance’s wouldnt see the light of day due to it been commercially unviable, then openreach is likely your best friend, whilst those of us living in poor cities, cityfibre might be our best friend.

      Also to note ciyfibre is a proper 1000/1000 both ways service, openreach seem still obsessed with segmentation to protected leased line market, hopefully in the future openreach will cover the political dead areas and expand their upload speeds.

    14. New_Londoner says:

      @GNewton
      Quote “Though I agree it’s good that they are trying to catch up, though BT won’t be able to compete with most of the altnets where deployed, BTs [sic] fibre isn’t symmetric.”

      Setting aside whether many customers care about symmetric speeds when by far the majority are buying services with sub-100Mbps download speeds, you presumably realise that more than a few altnets sell asymmetric services too?

  5. Value for Money says:

    This is a good news and BT have added another £37m to the BDUK capital deferral (KPI – Group-costs tab footnotes which should now read £825m, but there is no longer a full record in the footnotes and no record of the total.
    2019/2020 reads 2 Gross BDUK grant funding deferral (clawback) included in capacity/network: 2014/15: £29m; 2015/16: £229m; 2016/17: £188m; 2017/18: £112m; 2018/19: £213m; 2019/20: £17m

    2020/21 reads
    1 Gross BDUK grant funding deferral (clawback) included in capacity/network: 2018/19: £213m; 2019/20: £17m; 2020/21: £37m

    Mis-leading. A complete record is needed.

    1. The Facts says:

      BDUK and the LAs will have the details.

    2. Value for Money says:

      @facts ..The wonders of commercial confidentiality. The information denied select committees and audit functions, while the same information is being traded by ex BT Group relationships directors and ex BDUK folk at the expense of Openreach.

    3. Fastman says:

      VFM your unbelievable literally and metaphorically

    4. Value for Money says:

      @fastman .. only 200k english premises need to contracted to achieve 99%+ coverage and 1m of those can be full fibre.

      literally and metaphorically .. I hope the gaming of the process in Northern Ireland over the years does not lead to a failure for rural customers. A very basic level of transparency might be better than ex BDUK and ex BT relationship directors trading what is deemed commercially secret while risking a piece of national infrastructure.

      The increase in clawback this year is £37m the same amount as the BDUK allocation for Cumbria where many constituencies are still well below 90% coverage. What an opportunity to complete?

      Of my time in BT I spent 4 years focused in driving Mercury off the page. They were shocking. IMHO the normalised deviancy visited on this project by BT group executives is no less shocking and it has been matched by the attempts to keep it covered up.

    5. GNewton says:

      @TheFacts: “BDUK and the LAs will have the details.”

      You are quite detached from the real world. Have you ever tried FOI requests to get more information from various BDUK projects? I don’t think so.

    6. New_Londoner says:

      @GNewton
      Quote “Have you ever tried FOI requests to get more information from various BDUK projects?”

      That doesn’t make his comment that “BDUK and the LAs will have the details” wrong, simply says that you don’t have them, which is quite another matter.

    7. Hans says:

      @value for money

      this is a chance to go from presumably deluded online conspiracy theorist, who talks in riddles and needs a new hobby, to someone with a modicum of credibility. Who are the ex-BT directors and what is it they are doing that we should all be worried about?

      Or just more hot air to try and stay relevant.

    8. The Facts says:

      @VFM – ‘the same information is being traded by ex BT Group relationships directors and ex BDUK folk at the expense of Openreach.’

      Please explain. Your years of complaining have made no difference to telecomms in the UK.

  6. Rahul says:

    My only scepticism is whether Openreach will have the desire to overbuild in areas like London, which will basically be scooped up by the Altnet providers.

    As we know for the Copper switch off to occur an area must be covered by Openreach FTTP with 75% coverage. For this to happen Openreach must also build even in areas that have 100% Full Fibre coverage from Altnets, otherwise it is mathematically not possible to achieve a 25 million target without actually being forced to overbuild!

    25 million is 80+% of the UK with the remaining 20% 5 million covered with Altnets. Overbuilding is more or a less impossible to avoid. It will happen eventually, but I’m not sure if it will happen by December 2026. Seems very ambitious!

    I will finally have Community Fibre in a few months after years of waiting for the wayleave to resolve. I find it hard to believe that Openreach will touch existing MDU’s with an Altnet FTTP any time soon. Since I myself have seen most areas of London with Altnets don’t have any plans by Openreach for FTTP with the exception of newly built buildings/homes.

    1. New_Londoner says:

      @Rahul
      “25 million is 80+% of the UK with the remaining 20% 5 million covered with Altnets”

      Unlikely. In reality most of the network operators, including Openreach and Altnets, will be attracted to the same 80% of the market, with the remaining 20% in scope for at least some public subsidy.

      Whether the altnets build out 5 million premises before Openreach covers 80% remains to be seen given the current and accelerating build rate from Openreach which is leaving the altnets behind. This announcement puts more risk into the altnet build plans and, more importantly, the exit strategies of their funders.

    2. Aled says:

      Yeah probably more to scare the altnets (and even more likely to increase risk levels for any investors giving them money!).

      Heck, it was only recently bt has fully committed to gfast for the future!!

    3. Fastman says:

      Rahuol

      says the man who had the audicity to blame Openreach for the fact that is management agent in his building would not accept his preferred vendor Hyperoptic and he now has to go with another operator Community fibre

    4. Rahul says:

      Fastman: I never had any special preference for Hyperoptic. They were simply the only ones who had a sincere interest at that time to build in my building.

      While it is true that my management was to be the blame for wayleave. I’m not happy that Openreach took 8 years just to upgrade our faulty EO Line to FTTC while it was on their plan. FTTP was also on their plan briefly, but Openreach quickly surrendered. They weren’t as persistent in pushing my management team to agree on FTTP.

      Openreach could’ve captured many areas that didn’t have Altnets and upgrade them to FTTP and continue their monopoly. But instead, they have allowed Altnets to scoop up many MDU’s, areas where obtaining wayleave wouldn’t have been a problem at all!

      Now they have announced 25 million premises, which means they are having to do overbuilds in the same areas (previously refused) where Altnets are now available!

      I find this hilarious, because competition is now going to be much tougher for Openreach as they are now having to compete with providers who are offering much cheaper FTTP packages.

    5. FibreFred says:

      “I find this hilarious, because competition is now going to be much tougher for Openreach as they are now having to compete with providers who are offering much cheaper FTTP packages”

      Openreach don’t sell to the public. I assume you mean BT the ISP, in which case there has always been cheaper providers regardless of the technology and they still seem to do OK.

    6. New_Londoner says:

      @Rahul
      Quote “Now they have announced 25 million premises, which means they are having to do overbuilds in the same areas (previously refused) where Altnets are now available!”

      Of course, since the Openreach FTTP network far exceeds that of the altnets, it also means that altnets will increasingly have to overbuild Openreach coverage if they are to fulfil their coverage targets. Competition between fibre networks was an objective of Ofcom’s so should not come as a surprise to anyone.

      At current build rates, Openreach is covering the equivalent of the total City Fibre network roughly every three months. In the medium term, an area is far more likely to have coverage from Openreach than from an altnet as the latter are unlikely to reach a combined 80%+ coverage figure.

  7. FFF says:

    “could deliver further shareholder value by funding the additional 5m premises through a joint venture with external parties” …. I wonder if this refers to BDUk funding?

    1. FibreBubble says:

      No. It means that as every man and his dog are putting money into fibre builds with questionable return, maybe BT can get some of the cheap money action.

      It is pretty certain that the UK flag carrier will still be around when any bubble bursts.

  8. Stephen Adams says:

    Any one know when we can find out when our local exchange will get upgraded to 900 or 1 gig? Look like Padstow isn’t on the list again we have fibre but can only get 330 and 50 up but on the bt site it says we can get 900 but bt says we can’t get it is bt false advertising products they can’t deliver?

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