BT Slows FTTP Build as Cover Grows to 10.27 Million UK Premises UPDATE
BT Group has today published their latest Q4 FY23 (quarterly) results to March 2023, which saw Openreach’s Fibre-to-the-Premises (FTTP) broadband ISP network grow to cover 10.274 million premises (up by 702k in the quarter vs 810k last quarter) and EE increase their 5G Ready customer base to 9.12 million (up from 8.5m).
Firstly, BT’s consumer division – including EE and Plusnet – doesn’t publish full customer figures for their own retail ISP products, but they do report data for their “ultrafast broadband” (100Mbps+) packages and mobile service. The consumer ISP stated that they had 1.745 million FTTP customers (up from 1.559m last quarter) and EE’s “5G Ready” base now stands at 9.122 million (up from 8.505m). The population coverage of 5G also now stands at 68% of the UK.
Meanwhile, some 75.5% of BT’s fixed consumer base take a “superfast broadband” product (down from 77% last quarter) and 16.8% (up from 14.7%) have adopted one of their “ultrafast” products – including both G.fast and FTTP. We also noted that 21.6% of BT’s customers are now taking both mobile and broadband (converged), which is unchanged from last quarter.
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Financial Highlights – BT’s Quarterly Change
* BT Group revenue = £5,089m (down from £5,212m)
* BT Group total reported net debt = £18,859m (decreased from £19,226m)
* BT Group profit after tax = £585m (up from £427m)
Clearly, Openreach’s move last year to focus on cost savings in their FTTP build (here) has had an impact on their deployment pace, although they continue to maintain that they’ll be able to hit their 25 million premises target on time. But this suggests that they’ll need to maintain a higher rate of build for longer in the future to compensate, which is something we’ve yet to see.
At the same time BT’s CEO has spoken of his aim to turn the operator into a “leaner business” and, with that in mind, they appear to be planning to cut up to 55,000 more jobs (about 40% of their entire 130,000 strong workforce) by the end of this decade, as part of a cost-cutting drive. No doubt that’ll go down well with the unions.
Openreach’s Network
The table below offers a breakdown of fixed line network coverage and take-up by technology on Openreach’s UK network, which covers the totals for all ISPs that take their products combined (e.g. BT, Sky Broadband, TalkTalk, Zen Internet, Vodafone etc.).
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As usual, the rollout of their Fibre-to-the-Premises (FTTP) lines continues to grow, with 702,000 premises being added in the quarter, although that’s clearly down from 810,000 last quarter. As for take-up, some 3.123 million FTTP broadband connections have been made on Openreach’s network (up from 2.729m), which equates to a take-up of 30.4% (up from 28.51% last quarter) and that’s extremely impressive.
The rapid rollout of a new network almost always tends to suppress the take-up figure, thus Openreach continues to do extremely well to buck that trend – all despite an increasingly significant amount of competition from rival networks. This also goes to highlight the challenge AltNets are facing in peeling consumers away from the resident industry giant.
Philip Jansen, CEO of BT Group, said:
“We have delivered our outlook for FY23: this year we’ve grown both pro forma revenue and EBITDA for the first time in six years while navigating an extraordinary macro-economic backdrop. Over the last four years we have stuck firmly to our strategy and it’s working.
Openreach is competing strongly and it’s clear that customers love full fibre. The Openreach Board has reaffirmed its target to reach 25 million premises with FTTP by the end of 2026 and plans to further accelerate take-up on the network. In Consumer we’re delivering for customers with strong growth in FTTP and 5G, and we’re also seeing green shoots in B2B with a return to revenue growth in the final quarter in Global and the creation of our newly integrated Business unit.
By continuing to build and connect like fury, digitise the way we work and simplify our structure, by the end of the 2020s BT Group will rely on a much smaller workforce and a significantly reduced cost base. New BT Group will be a leaner business with a brighter future.”
Interestingly, BT’s results also included some new metrics, which appears to predict what the group will look like by the end of this decade. This is where the job cut data comes from, but is also gives us an insight into the fact that Openreach may expand their FTTP broadband rollout to cover up to 30 million premises by around 2030.
We say “may” because this is an ambition and, much like all those AltNet aspirations for future build, should be taken with a pinch of salt.
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Key transformation metrics
By the end of the decade, BT Group will be transformed, connecting for good and leading nationwide next- generation networks with best in class customer service and solutions.
In FY28-FY30, BT Group’s transformation will be reflected in:
• Reduction in total labour resource from 130k to between 75-90k
• Increase in Openreach FTTP premises passed from 10.3m to between 25-30m
• Increase in Openreach FTTP take-up from 30% to between 40-55%
• Increase in retail FTTP take-up from 1.8m to between 6.5-8.5m
• Increase in 5G UK population coverage from 68.1% to >98%, and 5G connections from 8.6m to between 13.0m-14.5m
• Increase in Group NPS from 22.1 to between 30-35
Finally, BT also highlights how much they’ll benefit from the UK Government’s new “full expensing” scheme, which was announced in the budget: “We expect to be a significant beneficiary of the UK Government’s full expensing scheme from FY24-FY26 and expect to pay no UK cash tax for the next three years. With demand for FTTP well ahead of our expectations, we will reinvest this benefit into further accelerating our FTTP connections and absorbing inflation whilst remaining committed to our target of building to 25m premises by the end of 2026, bringing our annual capex outlook to £5.0-5.1bn for FY24-FY26 inclusive. We expect take-up to accelerate beyond 30% whilst maintaining our build cost envelope of £250-£350 per premises.”
UPDATE 9:20am
We’ve had a comment from the Communication Workers Union (CWU), which is naturally a bit worried. But they do acknowledge that a lot of jobs will inevitably go as Openreach concludes the main thrust of their national FTTP rollout, since they won’t be needed any more.
A Spokesperson for the CWU said:
“BT’s announcement to the City this morning that there will be a reduction from around 130,000 employees and subcontractors to around 90,000 over the next 5 to 7 years is no surprise.
The introduction of new technologies across the company along with the completion of the fibre infrastructure build replacing the copper network was always going to result in less labour costs for the company in the coming years.
However, we have made it categorically clear to BT that we want to retain as many direct labour jobs as possible and that any reduction should come from sub-contractors in the first instance and natural attrition.
We have also stated that it’s imperative that we should be in the room discussing and shaping the new skills required of the workforce as they move to a more digital network to ensure our members have a stable, secure career within BT well into the future; to which the company has agreed ongoing discussions with the CWU on these matters.”
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 Linkedin.
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A lot of the jobs will go from Openreach. My understanding is that number incudes contractors as well
Bt the end of the Decade both the FTTP and 5G rollout should b e completed so they will need far less staff for that. Much of the legacy voice network will have gone as well
Contractors and retirees will make up a lot of the numbers here.
It’s a headline grabber, it’s about showing a long term strategy and that Jansen is delivering a legacy of transformation. The substance is very different though.
Potentially true of many sectors, not just telecoms. By 2030 Hinkley Point will be complete, the current UK road investment programme will have wound down, Heathrow’s un-needed R3 is supposed to be complete (perhaps held up when Bunter lies in front of the bulldozers, as he promised), the bulk of HS2 money will have been spent, the country will have frittered as much as credibly possible on wind and solar power, Thames Tideway will be complete, we’ve already finished CrossRail, and a massive railway rolling stock investment programmme. Government spending (ie policy driven, doesn’t matter whether it’s nominally private or not, key point is it isn’t market driven) has been a massive Keyensian splurge for about twenty years now, whilst some fools bleat about austerity. When the programmes wind down, what happens then to Britain’s economy, where “industrial strategy” appears to be about facilitating logistics for tax-avoiding foreign retailers and an economy based on coffee shops, betting shops and mobile phone retailers.
China is a good case study. Real estate comprises about a third of their entire GDP, a lot of these are ghost cities and most of these are poor quality 2nd and 3rd homes. Infrastructure is probably the 2nd biggest contributor to GDP with tons of rail to nowhere as communists love their 20th century rail and hate freedom of movement, resulting in empty trains costing billions in maintenance. Their bubble is starting to pop with the govt stepping in and taking even more control in companies such as Evergrande
The UK is following in Chinas footsteps with all the spending and ignoring viability of projects. Increasing taxes on flights while upgrading Heathrow is counter productive as less people will travel with more taxes. They completely ignored all reports on the HS2, the business case does not make sense however the vanity project has not been scrapped and just like Chinas rail, it will cost much more to maintain that what little benefit it will bring. Wind and solar do not make sense in a country with barely any wind and little amount of solar hours, yet they are being subsidized like a kid in a candy shop, loonie activists will still want more of them but eventually there at some point there must be some common sense saying “can we admit this experiment has failed”.
Now the thing is: the govt does not have an incentive to admit they are wrong. Opposition has a responsibility in opposing, but for whatever reason they are not doing so, instead they double down and claim spending is not enough. Once all these projects are completed, they will want to keep the artificial GDP vanity numbers and will make up new projects to burn cash
Wilson: “Wind and solar do not make sense in a country with barely any wind and little amount of solar hours,”
Detail point: Solar certainly makes no sense in the UK and has been a fabulous waste of money and farmland, but we’ve got massive wind resources – trouble is that the output is hugely variable, and it’s reasonably common to get a week to ten days with miserably low wind output, so you need some plan B to cover both short term fluctuations plus extended calm spells (eg 26 April to 5 May last year, on 9-16 December). We could be primarily wind powered as a nation, but to do that we’d need a proper energy strategy that works out how to “fill the gaps” bearing in mind that energy storage, wind to hydrogen, nuclear, interconnectors, demand side response and solar won’t give any good opr affordable answers any time soon (I’ve worked in this field for a decade).
And just as with national telecoms strategy, or transport, we haven’t had a properly planned and costed energy strategy in living memory, so government plough on with a higgledy-piggledy set of disjointed plans and policies, using policy levers to force private investment into things that consumers wouldn’t willing choose if they had a choice, snatching at every wet dream associated with net zero, having no idea what works, what it will cost the country and what the consequences are for consumers and industry.
The energy answer is always nuclear.
German idiots decided to scrap it = their energy costs tripled and they are resorting to burning coal to not have full blown riots
Finland decided to go nuclear = their costs got cut down by 75%. France is a net exporter of energy too using nuclear
I would argue against wind as not only the cost benefit analysis is dubious at best due them needing regular costly replacements, but also the wildlife impact particularly to birds
Agree with the fact that there is no proper plan in place other than blindly follow the netzero cult. Unfortunately the costs of this scam are being mostly kept away from the public (saying mostly as people are now feeling energy and food going up) and none of the main parties actually oppose it to the detriment of the people. Battlegrounds such as Holland will dictate how far is tolerable for the govt to implement these false gods
When the bulk of the rollouts are done indeed, Bob. The folks doing those jobs will either be handling other projects outside of telecoms or be working elsewhere in the world.
By 2028 no-one will be building in volume based on current plans. Fortunately we’ve other utility networks that need upgrade over the course of decades so that should keep some of them gainfully employed.
Yes, 14k are retiring this year alone or taking packages. And 30k of sub contractors so the numbers already there.
Wilson, I’m sorry you feel the UK is not extracting as much benfit from our work towards a better, greener, more connected society as you would personally like. But at what level of benefit should we not even bother attempting something? Unless you are suggesting HS2 will deliver absolutely NO benefit to anyone, ever. Is it still worth doing if it delivers 90% of the hoped for benefits, or 80%?
Same for Solar (though not Wind), sure we may not be blessed with as much sunlight as Spain, but it’s still a fact that Solar DOES work in the UK, just not as efficiently as other places. Is that a reason to not do something? Surely it would be even more irresponsible of us to not even try to adopt a better method of electricity generation.
You remind me of someone who would continually yell “It simply can’t be done” at the person who’s quietly getting on and doing it.
HS2 was expected to cost 98 BILLION pre inflation. It will balloon further. It will deliver poverty for everyone as post build it will need to be maintained as most reports have proved that the upside will put the project in deep red, not green
Solar rarely even pays for itself. The amount of energy it produces does not pay for its cost as it needs constant replacement. Not only that but the Chinese Communist Party almost has a monopoly on the rare earths and solar panel production so you want to fund genocide and war on Taiwan and south east asia
Your kind ignores arguments but it is stated above: nuclear
98 Billion!?
But that’s like 5 years IMMIGRANT funding!
hat’s another story
Wilson, your kind ignores the possibility that there can be more than one correct answer.
Nuclear, Solar, Wind can all exist at the same time.
Same for Telecoms – Fibre, Satellite, Radio… they all have advantages in different scenarios. Fibre/Nuclear, is an ideal long-term option. But it’s expensive and quite disruptive to build.
Radio/Solar may be quick and cheap but for many people it still brings an improvement to their time here on earth.
“Nuclear, Solar, Wind can all exist at the same time.”
Of course that’s a fact. It’s equally a fact that they are really, really poor mix to have. Nuclear is all fixed costs, there’s no savings turning output down. Wind is available capriciously, and you get it when it suits the wind. Solar is modestly dependable, but has appalling capacity factors in the UK and is mostly available when demand is lowest. Factor in variable daily demand that ranges between a summer low of 20GW and a winter peak of 50GW, and always has to be met, and you may start to see some of the issues. And that’s with road transport and heating from fossil fuels. Peak half hour heating demand in a winter cold spell is around 400GW, currently 90% met by gas. Electrify heating, and the dream of 100% carbon neutral power becomes a pipe dream.
And of course, getting further and further off topic. Sorry, Mark.
I can’t see them hitting the Dec 2026 target of 25M anymore, I can see it being revised to 2028. The numbers just aren’t adding up.
The are clearly having issues with builds and balancing the costs. Ours has ground to a halt again after about 20% of the area has been covered. Interestingly their map has now changed to state “We may pause the build etc”.
Have to agree @No Name. Slightly works in their favour if they do nationwide FTTP in 2028, as they’re also on track to get blanket 5G coverage in 2028. if EE is going to be the consumer brand, the marketing is there to be “everything everywhere” in Gigabit & 5G
Agree as no overtime either for the build engineers currently and very small quarterly targets. It’ll be impossible to hit 2026 now unless overtime comes back in a big way. But there’s no money
FTTP just isn’t coming to everyone. The build will be “complete” when there’s no financial incentive to build any more. Not when 99.7% have it (the oft-quoted figure for total completion).
Personally for us it’s time to look at FWA. We’ve had some frank discussions with OR and others, and basically been told that, unless something drastically changes, we’re just too expensive to service with FTTP. And that that isn’t likely to change this decade.
Now, we’re in the middle of a town of 20k people. Not even rural. But there are “engineering challenges” that can’t be overcome within their budgets.
The idea that this country can roll out FTTP to more than, say, 75% of properties, that pleasant fiction is going to be smacked on the head by reality in the next few years.
Openreach and BT are useless i spent over a year trying to get them to upgradge our housing estate to FTTP after 1 house round the corner paid for FTTPoD the engineers damaged the adsl cables during install meaning during 2020 lockdown we were left with intermttant and slow connections.
Then DCMS funding was available to upgrade 100 properties but when i tried to pledge the vouchers through openreach scheme they fobbed me off with excuses for a year untill 3 days before a cut off date i was never informed about and told me i needed to get 50 signatures from people now or they wouldnt continue. What scam the DCMS funding is
perhaps you should have grumped at the person who sorted them selves out in stead of doing something to help the estate but that not a headline is it
BBC reports that “up to a fifth” of job cuts at BT will be AI replacements:
https://www.bbc.co.uk/news/business-65631168
I suspect that means it will become pretty much impossible to get through to a human being if you have a problem.
I thought their customer service was already done by AI, run on a ZX81?
Most of it will be from the ending of the FTTP and 5G rollout and the closing down of the copper network
BT are also going to close about 4,600 exchanges
Fibre needs less maintenance than copper
Fibre reduces energy consumption
BT reckon most of the job cuts will come from customer services roles replaced by AI. Based on my experience of “AI” and voice chatbots, that sounds like a recipe to completely destroy your customer service – admitting defeat with cheap offshore call centres, deciding that reshoring to the UK is too expensive after they’ve done that, and then hoping that a combination of iffy voice recognition over rather dubious quality voice lines, combined with a computer guessing the answer is always “I’m Beata, your virtual customer service advisor. Whatever your problem is, please turn it off and then on again, thank you for your call..click..beeeeeep”.
If anybody wants a vision of the future, then Virgin Media are your model here. Imagine an AI boot stamping on a human face forever….
Many customer service tasks are repetitive and mundane: AI is fine for those. It frees up resources to reduce call waits to talk to humans regarding more complex issues and improve the customer experience overall.
IMHO investment in AI for customer services should come alongside investing in the customer service team. If they’re going to try and use it to eliminate jobs there that’s probably a pretty bad use of the technology.
AI can replace some basics and may do some jobs better than humans but it’ll never beat a human being aided by AI.
AI can be vastly superior, it just depends on the implementation.
XGS Is On: “Many customer service tasks are repetitive and mundane: AI is fine for those. It frees up resources to reduce call waits to talk to humans regarding more complex issues and improve the customer experience overall.”
Hahahahahahaha! hahahahahaaa aaaaaaa…wheeze..hahahahahahahahaahaaaaaaaa! Stop, I can’t breathe..hahahahaaaahhahahahahaha!
AI and bots are a cheap and crap solution that infuriates most customers and they’d avoid if they had the choice. We’ve all been there: “Have…I…got..it…right?..You..said…your..account..number…was..one…four…four…heaven…fife…forfar…plate…three?
And if you think that automating the mundane frees up quality human operatives to deal with more complex stuff, then clearly you’ve no experience of big customer service businesses. I have, and they’d gladly sack every call centre bod, pocket the savings and outsource it all to ChatGPT if they thought they could get away with it. Look at your typical large ISP (or energy supplier, they’re all much of a muchness) and standards of service are grim and the customer experience is horrible. If you don’t need to contact them then all is good, as soon as you need to interact it’s a miserable experience of circular and unhelpful IVR, crap chatbots, and if and when you do get to a human, they may or may not speak English, and regardless of that they’ll be constrained by poor systems and broken processes. Because so much of this is poor design, putting it all in the hands of AI chatbots is going to change the experience but not make it any better.
Just repeating what experts say. They could be wrong and anonymous on ISP Review could be right.
I’ve represented my employers at AI conferences at the Royal Society, and developed IT strategy for one of the world’s largest energy suppliers, I think I know enough about the technology potential of AI and the use described by BT to hold a valid opinion. But hey ho, if you want to rely on the press-reported musings of experts largely from companies who develop and sell AI or who tout their consultancy skills in the same place, then feel free to hold forth on all the third hand expertise you’ve acquired.
Given I have absolutely no way to verify or disprove your claims I can’t really give any kind of educated reply beyond that the comments I’m repeating aren’t from marketing material.
I have no idea where they’re going to get the people from to accelerate their build without spending a crazy amount of money.
I presume they’re waiting for altnets to stop building then will grab the staff freed up by them to plug some level of gaps.
The rest potentially can come training and immigration – a little slack has emerged in the employment market.
They will be people already inside the organisational already which will be working on the build as priority
Understood.
If there are so many people doing other things evidently not essential that they are able to move to fibre planning and the relevant civil engineering there’s probably a lot of room for redundancies in 5-7 years.
I agree with Fastman. There’s loads of people within BT Group that can be deployed to FTTP build if they’re struggling to find contractors.
I’d gladly do it if they kept me on my current pay 🙂
Interesting in this below:
FTTC SOGEA increase in FY23 Q1 to Q4 and G.fast SOGFAST increase as well.
SOGEA (Single Order Generic Ethernet Access) FTTC / FTTP which is laymens language is a broadband only line no voice (so assume microsoft Teams or 365 client or some VOIP to do the calls)
Would expect to that to increaase month on month on month on year
No mention in these posts of tidal and Severn Barrage power production, how long will it be before the realization that we need to build now not in 10 years. Severn barrage with road and rail links between Wales and England and virtually inexhaustible supply of power needed action 10 years ago, it would have been producing by now.
“No mention in these posts of tidal and Severn Barrage power production,”
Perhaps because this is a telecoms website and an article about a telecoms company?
The last proposal did not have road or rail.
With a few altnets building FTTP in my town I thought Openreach might finally put my town on the rollout plan but looking at this I guess not. To be honest that 2025 plan always look optimistic but when you haven’t even planned to deliver to a town of 10000+ people in mid 2023 it looks dishonest to still claim it as achievable.
Here’s hoping the altnets a) finally deliver (rollout from both is a year behind initial estimates) b) don’t go bust/stay reliable.
I live in a city of around 50,000 people and Openreach has no plans for us.
@Sonic, I find that highly unlikely. You just might not know the plans.
Hull has a big population yet openreach is not going there
Openreach aren’t equipped or manned to go to Hull and certainly aren’t going to go to the effort and expense of building such a team for the sake of a single city of 250,000. Plenty of their own patch to work on.
Sonic: Given the Openreach build in Winchester has now started I think it’s in someone’s plans somewhere.
@Sonic I live in a town of 20k. They’re doing the low-hanging fruit where there’s ducting, and the other houses aren’t being done this decade, or ever.
Being in a town/city where the rollout hasn’t started is 1000x better than being in a town where you’ve been intentionally skipped, and there are “no plans” to revisit. Believe me.
Honestly, unless the government takes over and stumps up most of the cash, the UK roll out will be “complete” once nobody is interested in building any more.
But the government will say there’s no money left and that will be that. Enjoy your copper network for the next 25 years.
If BT is to make 15000 fibre engineers redundant in coming years, could some of them be deployed to Ukraine when the war is over to help rebuild their fibre network?
Hull will not be high on Openreach’s list as Kingston Comms gave universals access to fibre over a decade ago and of course Kingston Comms was the sole operator of landlines there