BT Group Grows FTTP Broadband Coverage to 5.2m UK Premises

The BT Group has today reported their latest Q1 2021/22 results, which among other things reports that Openreach’s 1Gbps capable Fibre-to-the-Premises (FTTP) broadband ISP network now covers 5.16 million UK premises (up from 4.6m last quarter) and 860,000 of BT’s retail ISP customers have taken the service.

As usual, it’s been another busy quarter for the operator. Over the past few months BT has begun to replace Huawei’s 4G and 5G mobile kit (here), they’ve trialled a new hollow core fibre optic cable (here), launched the next generation of their Street Hub kiosks (here), introduced a new Pay TV set-top-box (here), reintroduced optional 12-month contract terms (here) and seen Altice UK gobble a 12.1% equity stake in the business (here).

On top of that, BT has signed a deal with OneWeb to potentially harness their LEO satellites for rural broadband (here) and they’ve also launched a new low-cost social tariff for those on benefits (here). Meanwhile, Openreach have published the first reference offer for their new Dark Fibre Access (DFA) product (here), while also suing Tii Technologies over faulty ADSL kit (here) and tweaking stop sell rules in copper to fibre migration areas (here).

Elsewhere, Openreach has appointed CommScope to supply some of its FTTP kit (here) and continued to expand their FTTP rollout programme (here), while also launching a major new discount for UK ISPs that take the same broadband service (here). On top of that they’ve also become one of the first UK operators to trial Nokia’s new 25Gbps PON kit (here).

Finally, Ofcom also ordered BT to improve their 10Mbps Universal Service Obligation (USO) for broadband (here) and the operator also managed to avoid the risk of a major national strike by the CWU (here), at least for now.

Financial Highlights – BT’s Quarterly Change
* BT Group revenue = £5,070m (down from £5,286m)
* BT Group profit after tax = £2m (down from £196m)
* BT Group total net debt = £18.566m (increased from £17,802m)

BT doesn’t report full customer figures for their own retail broadband ISP division, but they have started doing it for their ultrafast services. BT Consumer reported that they had 860,000 FTTP customers (up from 753K last quarter) and EE’s “5G Ready” base now stands at 4.088 million (up from 3.261m).

Meanwhile, some 82% of BT’s fixed consumer base now take a “superfast broadband” service (down slightly from 82.4% last quarter as customers move to FTTP) and this drops to just 6.6% (up from 5.5%) for their “ultrafast broadband” (100Mbps+) products (this covers both G.fast and FTTP technologies).

We also noted that some 21.5% of BT’s consumer and business customers are now on converged products (i.e. mobile and broadband).

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 +555,000 premises (down from +560K last quarter) and hybrid fibre G.fast being unchanged (G.fast deployments have long been suspended in favour of deploying more FTTP).

We normally expect the rapid rollout of any new technology to suppress the take-up figure, but Openreach’s FTTP still seems to be bucking this trend. The result reveals that, across all ISPs, some 1,086,000 FTTP connections have now been made (up from 905k last quarter) and that equates to a take-up of 21.03% (up from 19.6% last quarter) – this is impressive. But the operator’s plan to ramp-up their build may yet cause this to slide a bit.

Philip Jansen, CEO of BT Group, said:

“Our operational performance remained strong and our EBITDA grew during the first three months of the year, reflecting improved trading across most of our business and the positive benefits of our plans to modernise BT. Our results were overall in line with our expectations during the quarter, with good performance in the UK offsetting challenging conditions in Global’s markets.

We’re powering ahead with our network build programmes: Openreach has now built full fibre broadband to more than 5m premises with growing customer demand; EE has set out plans for 5G on demand anywhere in the UK by 2028. We’ve also reached a partnership agreement with our largest trade union, the CWU1 , allowing us to keep our modernisation plans on track.

We continue to invest in new strategic growth areas and have also today announced a strengthened strategic partnership with Microsoft that will see us accelerate co-innovation across all areas of our business, including enterprise voice and cyber security, supporting our growth strategy.

With trading conditions expected to see some improvement through the year, we have confirmed our outlook and remain confident that BT is on a path to growth.”

Otherwise, there’s not a lot to add this quarter.