{"id":19860,"date":"2020-01-30T09:55:26","date_gmt":"2020-01-30T09:55:26","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=19860"},"modified":"2020-01-30T10:01:50","modified_gmt":"2020-01-30T10:01:50","slug":"bt-build-fttp-and-g-fast-broadband-to-4-9-million-uk-premises","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2020\/01\/bt-build-fttp-and-g-fast-broadband-to-4-9-million-uk-premises.html","title":{"rendered":"BT Build FTTP and G.fast Broadband to 4.9 Million UK Premises"},"content":{"rendered":"

The BT<\/a> Group’s results for Q3 2019\/20 (financial) have revealed that Openreach<\/a> has expanded their “ultrafast broadband<\/em>” ISP network to cover 4.88 million UK premises (up from 4.2m last quarter), which includes 2.156m on FTTP<\/a> (up from 1.81m) and 2.725m on G.fast<\/a> (up from 2.42m). But the Gov’s Huawei decision will cost \u00a3500m!<\/p>\n

Clearly the big news today stems from the Government’s decision to allow Huawei into non-core parts of the UK mobile (5G<\/a>) and fixed broadband networks (here<\/a>). In response BT<\/a> said the new guidance will “have some impact on our 5G<\/a> rollout plans and the equipment used in our FTTP<\/a> network build going forwards<\/em>.” The impact is significant and estimated at around \u00a3500m<\/strong> over the next 5 years, but not much context is provided for this figure.<\/p>\n

Otherwise, since the last update, the operator has managed to launch their new converged – Halo – 5G<\/a> and fixed broadband plans (here<\/a>), purchased the entire UK estate of InLinkUK smart WiFi<\/a> kiosks (here<\/a>), experimented with their own DNS over HTTPS (DoH) servers (here<\/a>), scooped the contract for Scotland’s R100 project (here<\/a>), deployed 5G to more areas via EE<\/a> (here<\/a>) and confirmed that they were no longer deploying copper broadband at larger new build home sites (here<\/a>).<\/p>\n

On top of that BT<\/a> has managed to bring 100% of their customer service calls back to the UK and Ireland (here<\/a>), while Openreach<\/a> has expanded their FTTP<\/a> discounts to include smaller new build home developments (here<\/a>) and they’re now deploying to 250,000 “harder to reach<\/em>” premises (here<\/a>). Suffice to say that it’s been a fairly busy three months.<\/p>\n

Financial Highlights – BT’s Quarterly Change<\/strong><\/span>
\n* BT Group revenue = \u00a35,779m (down from \u00a35,780m)
\n* BT Group profit after tax = \u00a3458m (down from \u00a3563m)
\n* BT Group total net debt = -\u00a318,234m (from -\u00a318,347m)<\/p><\/blockquote>\n

The KPIs for BT’s results also noted that the gross<\/em> BDUK<\/span> grant funding deferral (clawback) included in capacity\/network was: 2014\/15: \u00a329m; 2015\/16: \u00a3229m; 2016\/17: \u00a3188m; 2017\/18: \u00a3112m; 2018\/19: \u00a3213m (total clawback so far = \u00a3771m<\/strong>). This reflects public money that can be returned by BT and reinvested by local authorities to help “superfast broadband<\/em>” coverage (potentially pushing it to 98% of the UK).
\n<\/span><\/p>\n

Sadly BT no longer provide customer figures for their own retail broadband ISP, although we note that 77.1% of their consumer broadband base now take a “superfast broadband<\/em>” service (up from 75.8% last quarter – mostly FTTC<\/a>) and this drops to just 2.1% (up from 1.6%) for their “ultrafast broadband<\/em>” (FTTP\/G.fast<\/a>) products.<\/p>\n

Openreach’s Network
\n<\/strong><\/span><\/h3>\n

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

Otherwise the rollout of full fibre lines remains the dominant one among the two “ultrafast<\/em>” technologies, with FTTP adding 346,000 premises (up from +296K last quarter) and hybrid fibre G.fast<\/a> adding 308,000 premises (up from +251K last quarter).<\/p>\n

\"openreach_q3_2019-20_network_coverage_and_takeup\"<\/p>\n

The results reveal that take-up of FTTP is 21.57% (down from 22.32% last quarter), while G.fast stands at 2.5% (up from 2.11% last quarter), although such figures don’t tell the whole story. Both technologies have been ramping up their roll-out and so adoption is likely to trail a bit (i.e. it’s dynamically impacted by lots of factors like consumer choice, awareness and deployment pace).<\/p>\n

Openreach also appear to have more or less hit their current target of 2.73 million G.fast premises by March 2020, although the technology is under review and as such we no longer know how far it will go after March or if they’ll go full steam on FTTP instead (the latter is expected). One positive point is that several of the major ISPs have now launched G.fast packages, which will aid take-up even if the technology is on the way out.<\/p>\n

Philip Jansen, CEO of BT Group, said:<\/strong><\/p>\n

“BT delivered results slightly below our expectations for the third quarter of the year, but we remain on track to meet our outlook for the full year.<\/p>\n

We continue to invest in the business. During the quarter we launched Halo, the UK\u2019s ultimate converged plan, which will give homes and businesses the best connection and service. We\u2019ve continued to use our national scale and local presence across the UK to provide customers with the best possible experience, for example by meeting our promise to answer all customer calls in the UK and Ireland and bringing BT sales and service back to the high street in nearly 500 BT\/EE<\/a> stores.<\/p>\n

Underpinning the ongoing development of market-leading propositions, we continue to invest in the best converged network. We welcomed the direction of Ofcom<\/a>\u2019s recent consultation, which is an important step forward towards a widely-shared ambition to invest in fibre across the whole of the UK. We\u2019re also investing in 5G, making it available in over 50 locations, with the first customers enjoying a great experience.<\/p>\n

The security of our network is paramount for BT. We therefore welcome and are supportive of the clarity provided by Government around the use of certain vendors in networks across the UK and agree that the priority should be the security of the UK\u2019s communications infrastructure. We are in the process of reviewing the guidance in detail to determine the full impact on our plans and at this time estimate an impact of around \u00a3500 million over the next 5 years.<\/p>\n

I\u2019m really excited about the long-term prospects for this great company and I\u2018m confident our plans will enable us to be bolder, smarter, and faster to ensure that we remain successful and create a better BT for the future.”<\/p><\/blockquote>\n

Going forwards into 2020 we suspect that one of the BT Group’s biggest challenges could stem from what happens with Virgin Media<\/a> and whether or not that operator splits off their network to wholesale under the new Liberty Networks division (here<\/a>). Such a move would provide Openreach with a significant national competitor at infrastructure level and isn’t likely to do BT’s share price much good. How they respond to that will be key.<\/p>\n

Otherwise we note that FTTP broadband build pace was 23,000 premises passed per week in October 2019, then 26,000 premises in January 2020 and Openreach expects to exit 2019\/20 (i.e. next quarter) with an impressive run rate of around 30,000 per week<\/strong>.<\/p>\n

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