{"id":23396,"date":"2020-10-29T07:45:41","date_gmt":"2020-10-29T07:45:41","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=23396"},"modified":"2020-10-29T07:58:59","modified_gmt":"2020-10-29T07:58:59","slug":"bt-group-sees-fttp-broadband-reach-3-5-million-uk-premises","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2020\/10\/bt-group-sees-fttp-broadband-reach-3-5-million-uk-premises.html","title":{"rendered":"BT Group Sees FTTP Broadband Reach 3.5 Million UK Premises"},"content":{"rendered":"

The BT<\/a> Group has today published their Q2 2020\/21 results, which saw Openreach<\/a> expand their gigabit-capable Fibre-to-the-Premises (FTTP<\/a>) broadband ISP network to cover 3.5 million UK premises (up from 2.98m last quarter). The full fibre build rate has now hit 40,000 premises per week (up from c.34,000).<\/p>\n

The most recent quarter has been quite eventful for BT<\/a>, not least with speculation growing that they could become the subject of a \u00a315bn takeover attempt (here<\/a>). Meanwhile Openreach<\/a> have run into a snag with their latest trial of G.INP (ReTx) technology on ECI based FTTC<\/a> broadband lines (here<\/a>) and they may have lost out on a key FTTP<\/a> contract in Northern Ireland<\/strong> (here<\/a>), which is despite delivering strong commercial coverage (here<\/a>).<\/p>\n

Speaking of FTTP<\/a>, Openreach<\/a> recently announced the next batch of 67 UK areas for their FTTP rollout programme (here<\/a>) and they’ve added another 51 locations to their future copper phone retirement plan (here<\/a>). Elsewhere a number of Openreach’s engineers received birthday honours from the Queen (here<\/a>) and a reward of \u00a320k has been offered to help catch a gang of copper cable thieves in London (here<\/a>).<\/p>\n

Finally, BT<\/a>’s redundancy plan is facing the possibility of strike action from the CWU (here<\/a>) and Ofcom<\/a> have begun a probe of BT’s compliance with their obligations under the new 10Mbps Universal Service Obligation for broadband (here<\/a>).<\/p>\n

Financial Highlights – BT’s Quarterly Change<\/strong><\/span>
\n* BT Group revenue = \u00a35,357m (up from \u00a35,250m)
\n* BT Group profit after tax = \u00a3408m (down from \u00a3448m)
\n* BT Group total net debt = \u00a317,627m (decreased from \u00a318,157m)<\/p><\/blockquote>\n

BT no longer includes full customer figures for their own retail broadband ISP (this usually means they’re in decline), but they have started doing it for their newest services. For example, BT Consumer reported that they had 598,000 FTTP customers (up from 512K last quarter) and EE<\/a>’s “5G<\/a> Ready<\/em>” base now stands at 1.23 million (up from 374K). Overall 82.4% of BT’s fixed consumer base now take a “superfast broadband<\/em>” service (up from 81.8% last quarter – mostly FTTC<\/a>) and this drops to just 2.7% (up from 2.5%) for their FTTP and G.fast<\/a> based “ultrafast broadband<\/em>” products.<\/p>\n

Separately BT’s KPIs also reveal that the total gross<\/em> BDUK<\/span> grant funding deferral (clawback) included in capacity\/network remains unchanged<\/em> on \u00a3788m<\/strong>. <\/span>This reflects public money that is either in the process of or could in the future be returned by BT and reinvested by local authorities to help boost superfast broadband coverage. A big chunk of this has already been re-invested into such contracts or has been provisionally allocated to future ones.<\/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\u2019s national UK network, which covers the totals for all ISPs that take their products combined (e.g. BT, Sky Broadband<\/a>, TalkTalk<\/a>, Zen Internet<\/a>, Vodafone<\/a> etc.).<\/p>\n

The roll-out of full fibre lines remains the dominant one amongst the two “ultrafast<\/em>” technologies, with FTTP adding +521,000 premises (up from +404K last quarter) and hybrid fibre G.fast<\/a> being unchanged. As most people know, G.fast<\/a> deployments have been suspended in favour of FTTP (expected to be reviewed again in March 2021 but no change is expected). We note that the FTTP build rate is now 40,000 premises per week!<\/p>\n

All four major ISPs on Openreach’s network are now selling FTTP and orders grew 100% compared to Q2 last year. Weekly orders have grown from an average of c.7k pre-lockdown to c.13k in September 2020.<\/p>\n

NOTE:<\/strong> BT Group are investing \u00a312bn<\/a> to cover 20 million UK premises with FTTP by around the mid to late 2020s (2025 – 2030), with the first aim being 4.5m by March 2021.<\/div>\n

\"openreach_q2_2020-21_network_coverage_and_takeup\"<\/p>\n

The results also reveal that take-up of FTTP is now 18.71% (up from 18.6% last quarter), while G.fast stands at just 4.87% (up from 3.46% last quarter). At this stage of the roll-out we’d normally expect the build rate to be suppressing take-up (i.e. connections being built faster than new customers can sign-up, as well as other dynamic factors like consumer choice and awareness), but this time around Openreach seems to have bucked that trend. Meanwhile G.fast’s take-up is growing slowly now that it’s no longer being deployed, although the appetite for that service remains weak.<\/p>\n

Openreach plan to ramp-up their FTTP deployment (target to cover 20 million UK premises by around 2025-2030) and so we wouldn’t be surprised to see that acting to suppress their take-up figures in future quarters, but today’s results are otherwise a very promising indication of strong consumer appetite. We suspect a lot of the recent take-up boost will have been driven by competition pricing among mainstream providers.<\/p>\n

Otherwise, one of the best ways to examine take-up is to focus on areas where a technology has been live for 12 and 24 months or longer, but sadly such data is not provided above.<\/p>\n

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

“BT delivered financial results in-line with expectations for the first half of the year, thanks to strong operational performance during exceptional circumstances. Customer demand during the pandemic has shown how critical our networks have become, and our significant network investments have helped us double the number of Openreach\u2019s FTTP orders compared to this time last year and have seen our leading 5G<\/a> network expand to 112 towns and cities across the UK.<\/p>\n

We continue to invest to make BT more competitive and I\u2019m pleased to see the quality of our products and services improving. At the same time we are firmly on track with the delivery of our modernisation programme and have delivered \u00a3352m in cost savings in the first half of the year.<\/p>\n

This performance has given us confidence to raise the lower end of our EBITDA outlook range for this year and publish an EBITDA expectation of at least \u00a37.9bn for 2022\/23, with sustainable growth from this level forward. This growth will be driven by the continued recovery from Covid-19, enhanced by sales of our converged and growth products, and by significant savings from our modernisation and cost saving programme. In combination these factors will more than offset legacy product declines.<\/p>\n

The growth in EBITDA underpins the planned reinstatement of our dividend next year whilst ensuring that we can continue to drive value-creating investments in our networks and products.”<\/p><\/blockquote>\n

Elsewhere BT reported that they had delivered \u00a3352m in savings through their “modernisation programme<\/em>” in the first six months of the financial year (this is gross annualised savings at a cost of \u00a3163m), which comes ahead of their current plan to achieve \u00a32bn of savings over five years.<\/p>\n

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