{"id":18555,"date":"2019-05-09T07:11:09","date_gmt":"2019-05-09T06:11:09","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=18555"},"modified":"2019-05-09T09:15:25","modified_gmt":"2019-05-09T08:15:25","slug":"openreach-aim-for-15-million-uk-fttp-broadband-premises-by-2025","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2019\/05\/openreach-aim-for-15-million-uk-fttp-broadband-premises-by-2025.html","title":{"rendered":"Openreach Aim for 15 Million UK FTTP Broadband Premises by 2025"},"content":{"rendered":"<p>Telecoms giant <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/openreach\" target=\"_blank\">Openreach<\/a> (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/britishtelecom\" rel=\"nofollow\" target=\"_blank\">BT<\/a>) has today confirmed a significant ramping-up of their UK &#8220;<strong><a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2018\/02\/openreach-aim-fttp-broadband-3-million-premises-8-uk-cities.html\"><em>Fibre First<\/em><\/a><\/strong>&#8221; rollout of 1Gbps capable Fibre-to-the-Premises (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/fttp\">FTTP<\/a>) broadband ISP technology, which will now aim to cover 4 million homes and businesses by March 2021 (up from 3m) and an ambition for 15 million by around 2025 (up from 10m).<!--more--><\/p>\n<p>Over the past few months <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/openreach\" target=\"_blank\">Openreach<\/a> have been busy hiring thousands of new engineers to support the roll-out and their &#8220;<em>full fibre<\/em>&#8221; network has already reached<strong> 1.2 million premises<\/strong> (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2019\/04\/openreach-confirm-12-new-uk-areas-for-fttp-ultrafast-broadband.html\">here<\/a>). As a result their overall build rate is now running at around 20,000 UK homes passed per week (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2019\/04\/openreach-making-strong-progress-on-fttp-for-new-build-homes.html\">here<\/a>), which is three times quicker than a little over one year ago.<\/p>\n<p><a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/openreach\" target=\"_blank\">Openreach<\/a> today said they continue to deliver <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/fttp\">FTTP<\/a> at the &#8220;<em>lower end<\/em>&#8221; of its <strong>\u00a3300 &#8211; \u00a3400 per premises passed<\/strong> cost range and believes that it can &#8220;<em>pass around 50% of UK premises within this range of costs<\/em>&#8220;.<\/p>\n<p>By comparison today&#8217;s announcement marks another significant shift in strategy from Openreach&#8217;s pre-2018 approach, which originally only pledged to cover 2 million premises with <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/fttp\">FTTP<\/a> and 10 million via their slower but cheaper to deploy 330Mbps capable hybrid-fibre <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/gfast\">G.fast<\/a> technology by the end of 2020 (March 2021 financial).<\/p>\n<p>However Openreach&#8217;s original strategy was set before <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/cityfibre\" target=\"_blank\">Cityfibre<\/a>, <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/hyperopticfibre\" rel=\"nofollow\" target=\"_blank\">Hyperoptic<\/a> and other alternative network ISPs had announced major UK &#8220;<em>full fibre<\/em>&#8221; deployments of their own (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2018\/04\/building-uk-summary-fttp-broadband-rollouts-investment.html\"><strong>Summary of Full Fibre Plans<\/strong><\/a>). Furthermore it also came before the Government&#8217;s <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2018\/07\/gov-detail-major-changes-to-boost-uk-full-fibre-broadband-and-5g.html\"><strong>Future Telecoms Infrastructure Review<\/strong><\/a> (FTIR), which set out a raft to changes to help the Government achieve its ambition for &#8220;<em>nationwide<\/em>&#8221; FTTP coverage by 2033.<\/p>\n<p>Suffice to say that a mix of regulatory changes, political pressure, a new <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/britishtelecom\" rel=\"nofollow\" target=\"_blank\">BT<\/a> Group CEO (<strong>Philip Jansen<\/strong>) and stronger competition now appears to be encouraging a change. Most of this is focused upon urban areas where Openreach and <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/vm\" rel=\"nofollow\" target=\"_blank\">Virgin Media<\/a> have traditionally dominated and made most of their money (Openreach are however still doing a fair bit of rural FTTP under extended <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/bduk\" target=\"_blank\">Broadband Delivery UK<\/a> contracts).<\/p>\n<p>Since 2017 we&#8217;ve thus seen Openreach raise their initial FTTP coverage target from 2 to 3 million premises in February 2018 and then scaleback their <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/gfast\">G.fast<\/a> rollout from 10 million to c.5.7 million in August 2018 (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2018\/08\/openreach-to-scale-back-rollout-of-g-fast-broadband-focus-on-fttp.html\">here<\/a>). Today essentially marks a continuation of that trend as the operator recognises that they have to change faster than their competition or risk losing a much bigger chunk of market share.<\/p>\n<blockquote class=\"bq1\"><p><strong>Philip Jansen, <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/britishtelecom\" rel=\"nofollow\" target=\"_blank\">BT<\/a> Group CEO, said:<\/strong><\/p>\n<p>&#8220;Our aim is to deliver the best converged network and be the leader in fixed ultrafast and mobile <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/5g\">5G<\/a> networks. We are increasingly confident in the environment for investment in the UK. We have already announced the first 16 UK cities for <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/5g\">5G<\/a> investment.<\/p>\n<p>Today we are announcing an increased target to pass 4m premises with ultrafast FTTP technology by 2020\/21, up from 3m, and an ambition to pass 15 million premises by the mid-2020s, up from 10 million, if the conditions are right, especially the regulatory and policy enablers.&#8221;<\/p><\/blockquote>\n<p>We have long predicted that one of Jansen&#8217;s first acts after taking over as CEO of BT Group, which still holds the money for Openreach to spend, would be to confirm their strategy for a &#8220;<em>large scale<\/em>&#8221; roll-out of FTTP. The operator previously estimated that reaching 10 million premises could cost between <strong>\u00a33bn to \u00a36bn<\/strong> and costs rise disproportionately the further you go outside of the most lucrative urban areas.<\/p>\n<p>However one subtle caveat in today&#8217;s announcement is that BT are still saying that their 2025 ambition &#8220;<em>remains subject to conditions being right<\/em>,&#8221; which suggests that they&#8217;ve yet to solidify the necessary agreements with <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/ofcom\" target=\"_blank\">Ofcom<\/a> \/ Government (examples given include support for wayleaves and extension of the 5 year business rate relief on new fibre). On the other hand they wouldn&#8217;t be raising their long-term ambition if there wasn&#8217;t some confidence in the direction of travel, which is alluded to in Jansen&#8217;s comment.<\/p>\n<p>At this point you might ask, where will all of the money for this come from? Aside from regulatory and policy changes to help make FTTP deployments cheaper (FTIR etc.), another big chunk of it seems likely to come from the loss of more jobs from within BT (one report predicted a future <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2019\/03\/bts-new-uk-ceo-allegedly-mulling-possibility-of-25000-job-cuts.html\">cut of 25,000 full time staff<\/a>, albeit mildly mitigated by rising engineer numbers).<\/p>\n<p>Similarly Openreach&#8217;s recent consultation on their plans to gradually switch-off the old legacy copper line network (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2019\/03\/openreach-consults-uk-broadband-isps-on-copper-switch-off.html\">here<\/a>), as FTTP is deployed, also hinted that the <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/gfast\">G.fast<\/a> rollout could be scaled-back again in order to become even more targeted toward non-FTTP areas (ignoring some of the usual overlap between networks).<\/p>\n<p>Overall this is generally very good news, although some of Openreach&#8217;s rivals do have concerns. In particular some altnet ISPs fear that a more aggressive push into FTTP could reduce &#8220;<em>full fibre<\/em>&#8221; coverage improvements through overbuild, while also creating more disruption for locals (i.e. repetitive street works by different operators in the same area) and enabling the telecoms giant to slowly rebuild a dominant position (i.e. squeezing out new competitors with its weight).<\/p>\n<p>Meanwhile the often proposed idea of trying to solve this dilemma by having everybody work together (e.g. sharing infrastructure to avoid overbuild) seems unlikely to succeed given the different approaches and complex regulatory \/ business \/ wholesale models involved. The phrase &#8220;<em>like herding cats<\/em>&#8221; comes to mind.<\/p>\n<p>On the flip side the majority of this battle is taking place in commercially competitive urban areas (i.e. doesn\u2019t generally involve any public investment) and that is seen by many as fair game for whoever (private sector) wants to take the risk by spending big. Overbuild also increases consumer choice, which is a positive (e.g. like the old Openreach vs <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/vm\" rel=\"nofollow\" target=\"_blank\">Virgin Media<\/a> networks).<\/p>\n<p>So far the Government has chosen not to act against overbuild, although <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/ofcom\" target=\"_blank\">Ofcom<\/a> have said that they will &#8220;<em>remain vigilant<\/em>&#8221; of situations where Openreach could use a &#8220;<em>first-mover advantage<\/em>&#8221; and &#8220;<em>specific predatory actions<\/em>&#8221; to undermine rival altnets (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2018\/12\/rival-uk-isps-raise-alarm-over-full-fibre-competition-and-openreach.html\">here<\/a>). Openreach might well feel a touch of &#8216;damned if they do, damned if they don&#8217;t&#8217; about some aspects of today&#8217;s market.<\/p>\n<p><strong>UPDATE 9:11am<\/strong><\/p>\n<p>The CEO of Openreach has also justgiven his reaction to today&#8217;s announcement.<\/p>\n<blockquote class=\"bq1\"><p><strong>Clive Selley, CEO of Openreach, said:<\/strong><\/p>\n<p>&#8220;The Government\u2019s ambition is to see a nationwide full-fibre network by 2033 &#8211; but that\u2019s a huge ask. If it\u2019s going to happen, I know Openreach will need to do the heavy lifting, so we\u2019re working hard to build a business case which makes it commercially viable to upgrade the majority of the UK.<\/p>\n<p>We\u2019re determined to be the UK\u2019s full fibre broadband provider and we\u2019ve been encouraged by the direction of Government and <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/ofcom\" target=\"_blank\">Ofcom<\/a> in supporting that investment case.<\/p>\n<p>That said, if we\u2019re to build to 15 million premises and beyond, we do still need the certainty of a regulatory framework which encourages investment in the long-term. And we need action to address the \u2018Cumulo\u2019 tax on fibre infrastructure, along with a mass of red-tape and barriers which hamper our efforts to upgrade apartment blocks and new developments.<\/p>\n<p>The Government urgently needs to take steps to address these barriers. I hope some renewed energy can be brought to bear on what\u2019s a crucial national infrastructure project, and one that we believe will create the platform for productivity growth and prosperity post-Brexit.&#8221;<\/p><\/blockquote>\n<p>The &#8220;<em>Cumulo<\/em>&#8221; rate is just the phrase used to describe the tax on commercial property, which is defined by the Valuation Office Agency (VOA) as BT&#8217;s network (ducts, poles, parts of exchange buildings and other assets).<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Telecoms giant Openreach (BT) has today confirmed a significant ramping-up of their UK &#8220;Fibre First&#8221; rollout of 1Gbps capable Fibre-to-the-Premises (FTTP) broadband ISP technology, which will now aim to cover 4 million homes and businesses by March 2021 (up from 3m) and an ambition for 15 million by around 2025 (up from 10m).<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1,1645],"tags":[474,65,56,69],"class_list":["post-18555","post","type-post","status-publish","format-standard","hentry","category-uk_isp_news","category-key_uk_isp_industry_developments","tag-bt","tag-ftth","tag-fttp","tag-bt-openreach"],"share_on_mastodon":{"url":"","error":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.2 - 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